Hess Reports Estimated Results for the Third Quarter of 2022

Rhea-AI Summary

Hess Corporation (NYSE: HES) reported a significant increase in third-quarter 2022 net income, reaching $515 million, or $1.67 per share, compared to $115 million, or $0.37 per share, in Q3 2021. Adjusted net income was $583 million, bolstered by rising oil prices and production levels. The Stabroek Block in Guyana saw two new discoveries, enhancing its resource estimate to approximately 11 billion barrels of oil equivalent. Cash returned to shareholders totaled $265 million, including $150 million in share repurchases. E&P capital expenditures rose to $701 million, reflecting intensified drilling activities.

Positive

• Net income increased to $515 million, up from $115 million in Q3 2021.
• Adjusted net income rose to $583 million compared to $86 million in the prior-year quarter.
• Oil and gas net production increased by 32% to 351,000 boepd from 265,000 boepd in Q3 2021.
• Total cash returned to stockholders was $265 million in the quarter.
• Yarrow-1 and Sailfin-1 discoveries add to the resource estimate of the Stabroek Block, now at approximately 11 billion boe.

Negative

• Cash operating costs increased to $13.19 per boe from $12.76 per boe year-over-year.
• Impairment charges of $28 million impacted E&P results due to abandonment liabilities.

Key Developments:

• Announced Yarrow-1 and Sailfin-1 as the 8^th and 9^th discoveries this year on the Stabroek Block, offshore Guyana; adds to the previous gross discovered recoverable resource estimate for the Block of approximately 11 billion barrels of oil equivalent (boe)
• Total cash returned to stockholders in the quarter through share repurchases and dividends amounted to $265 million; approximately 1.4 million shares of common stock were repurchased for $150 million in the quarter

Third Quarter Financial and Operational Highlights:

• Net income was $515 million, or $1.67 per common share, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021
• Adjusted net income¹ was $583 million or $1.89 per common share, compared with net income of $86 million, or $0.28 per common share in the prior-year quarter
• Oil and gas net production, excluding Libya, was 351,000 barrels of oil equivalent per day (boepd), up 32 percent from 265,000 boepd in the third quarter of 2021
• Bakken net production was 166,000 boepd, up 12 percent from 148,000 boepd in the third quarter of 2021; Guyana net production was 98,000 barrels of oil per day (bopd), compared with 32,000 bopd in the prior-year quarter
• E&P capital and exploratory expenditures were $701 million compared with $498 million in the prior-year quarter
• Cash and cash equivalents, excluding Midstream, were $2.38 billion at September 30, 2022

2022 Updated Guidance:

• Net production, excluding Libya, is forecast to be approximately 370,000 boepd in the fourth quarter and approximately 325,000 boepd for the full year
• Full year E&P capital and exploratory expenditures are expected to be approximately $2.7 billion, unchanged from previous guidance

NEW YORK--(BUSINESS WIRE)--    Hess Corporation (NYSE: HES) today reported net income of $515 million, or $1.67 per common share, in the third quarter of 2022, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021. On an adjusted basis, the Corporation had net income of $583 million or $1.89 per common share, compared with $86 million, or $0.28 per common share, in the third quarter of 2021. The improvement in adjusted after-tax earnings compared with the prior-year period was primarily due to higher realized selling prices and sales volumes in the third quarter of 2022.

   “We continue to successfully execute our strategy and deliver strong operational and ESG performance,” CEO John Hess said. “We offer a unique value proposition – to grow both our intrinsic value and our cash returns by increasing our resource base, delivering a lower cost of supply and generating industry leading cash flow growth. As our portfolio becomes increasingly free cash flow positive, we will continue to prioritize the return of capital to our shareholders through further dividend increases and share repurchases.”

1.

“Adjusted net income” 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 and 7 .

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

		Three Months Ended September 30, (unaudited)						Nine Months Ended September 30, (unaudited)
		2022			2021			2022			2021
			(In millions, except per share amounts)
Net Income Attributable to Hess Corporation
Exploration and Production		$	572		$	178		$	1,755		$	461
Midstream			68			61			205			212
Corporate, Interest and Other			(125)			(124)			(361)			(379)
Net income attributable to Hess Corporation		$	515		$	115		$	1,599		$	294
Net income per common share (diluted)		$	1.67		$	0.37		$	$ 5.16		$	0.95
Adjusted Net Income Attributable to Hess Corporation
Exploration and Production		$	626		$	149		$	1,809		$	579
Midstream			68			61			205			212
Corporate, Interest and Other			(111)			(124)			(360)			(379)
Adjusted net income attributable to Hess Corporation		$	583		$	86		$	1,654		$	412
Adjusted net income per common share (diluted)		$	1.89		$	0.28		$	5.33		$	1.33
Weighted average number of shares (diluted)			308.9			309.9			310.1			309.1

Exploration and Production:

   E&P net income was $572 million in the third quarter of 2022, compared with $178 million in the third quarter of 2021. On an adjusted basis, third quarter 2022 E&P net income was $626 million, compared with $149 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $85.32 per barrel in the third quarter of 2022, compared with $63.17 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the third quarter of 2022 was $35.44 per barrel, compared with $32.88 per barrel in the prior-year quarter, while the average realized natural gas selling price was $5.85 per mcf, compared with $4.71 per mcf in the third quarter of 2021.

   Net production, excluding Libya, was 351,000 boepd in the third quarter of 2022, compared with 265,000 boepd in the third quarter of 2021, 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 $13.19 per boe (excluding Libya: $13.64 per boe) in the third quarter of 2022, compared with $12.76 per boe (excluding Libya: $13.45 per boe) in the prior-year quarter. The increase in cash operating costs in the third quarter of this year, compared with the third quarter of last year, reflects higher production and severance taxes in North Dakota due to higher realized selling prices, and increased workover activity in the Gulf of Mexico.

Operational Highlights for the Third Quarter of 2022:

   Bakken (Onshore U.S.): Net production from the Bakken was 166,000 boepd compared with 148,000 boepd in the prior-year quarter, primarily due to increased drilling and completion activity and a curtailment of production in the third quarter of 2021 resulting from a planned maintenance turnaround at the Tioga Gas Plant. The Corporation added a third drilling rig in September 2021 and a fourth drilling rig in July 2022. During the third quarter of 2022, the Corporation drilled 20 wells, completed 20 wells, and brought 22 new wells online. Bakken net production is forecast to be in the range of 165,000 boepd to 170,000 boepd in the fourth quarter and approximately 155,000 boepd for the full year 2022.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 30,000 boepd, compared with 32,000 boepd in the prior-year quarter.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 98,000 bopd in the third quarter of 2022 compared with 32,000 bopd in the prior-year quarter. Net production from Guyana in the third quarter of 2022 included 7,000 bopd of tax barrels. There were no tax barrels in the third quarter of 2021. The Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of 220,000 gross bopd in July 2022. In the third quarter, we sold eight cargos of crude oil from Guyana compared with three cargos in the prior year quarter. In the fourth quarter of 2022, we expect to sell nine cargos of crude oil. Guyana net production is forecast to be approximately 110,000 bopd in the fourth quarter, which includes approximately 20,000 bopd of tax barrels. For the full year 2022, Guyana net production is forecast to be approximately 77,000 bopd, which includes approximately 7,000 bopd of tax barrels.

   The third development, Payara, will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first production expected at the end of 2023. The fourth development, Yellowtail, was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross bopd, with first production expected in 2025.

   The eighth and ninth discoveries of this year were announced at Yarrow-1 and Sailfin-1, which adds to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion boe. The Yarrow-1 well encountered approximately 75 feet of high quality oil bearing sandstone reservoirs. The well was drilled in 3,560 feet of water and is located approximately 9 miles southeast of the Barreleye-1 discovery. The Sailfin-1 well encountered approximately 312 feet of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 4,616 feet of water and is located approximately 15 miles southeast of the Turbot-1 discovery.

   The Banjo-1 exploration well was drilled during the quarter and did not encounter commercial quantities of hydrocarbons.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 57,000 boepd in the third quarter of 2022 compared with 50,000 boepd in the prior-year quarter, primarily due to higher buyer nominations.

Midstream:

   The Midstream segment had net income of $68 million in the third quarter of 2022, compared with net income of $61 million in the prior-year quarter.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $125 million in the third quarter of 2022, compared with $124 million in the third quarter of 2021.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $701 million in the third quarter of 2022 compared with $498 million in the prior-year quarter, primarily due to higher drilling and development activities in the Bakken, Malaysia and JDA, Gulf of Mexico and Guyana. Midstream capital expenditures were $60 million in the third quarter of 2022 and $59 million in the prior-year quarter.

Liquidity:

   Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.38 billion and debt and finance lease obligations totaling $5.60 billion at September 30, 2022. The Midstream segment had cash and cash equivalents of $3 million and total debt of $2.9 billion at September 30, 2022. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 36.8% at September 30, 2022 and 42.3% at December 31, 2021.

   Net cash provided by operating activities was $1,339 million in the third quarter of 2022, up from $615 million in the third quarter of 2021. Net cash provided by operating activities before changes in operating assets and liabilities² was $1,405 million in the third quarter of 2022, compared with $631 million in the prior-year quarter primarily due to higher realized selling prices and sales volumes.

   Total cash returned to stockholders in the third quarter through common stock repurchases and dividends amounted to $265 million. The Corporation repurchased approximately 1.4 million shares of common stock for $150 million during the third quarter and intends to acquire the remaining available Board authorized amount of $310 million in the fourth quarter.

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 6 and 7 .

   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)
		2022			2021			2022			2021
			(In millions)
Exploration and Production		$	(54)		$	29		$	(54)		$	(118)
Midstream			—			—			—			—
Corporate, Interest and Other			(14)			—			(1)			—
Total items affecting comparability of earnings between periods		$	(68)		$	29		$	(55)		$	(118)

   Third Quarter 2022: E&P results include 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 include a charge of $14 million ($14 million after income taxes) for legal costs related to a former downstream business.

   Third Quarter 2021: E&P results include a pre-tax gain of $29 million ($29 million after income taxes) associated with the sale of the Corporation's interests in Denmark.

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)
		2022			2021			2022			2021
			(In millions)
Net income attributable to Hess Corporation		$	515		$	115		$	1,599		$	294
Less: Total items affecting comparability of earnings between periods			(68)			29			(55)			(118)
Adjusted net income attributable to Hess Corporation		$	583		$	86		$	1,654		$	412

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)
		2022			2021			2022			2021
			(In millions)
Net cash provided by (used in) operating activities before changes in operating assets and liabilities		$	1,405		$	631		$	3,820		$	2,105
Changes in operating assets and liabilities			(66)			(16)			(1,128)			(114)
Net cash provided by (used in) operating activities		$	1,339		$	615		$	2,692		$	1,991

   Hess Corporation will review third 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, perceptions regarding the oil and gas industry, competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring, fracking bans as well as restrictions on oil and gas leases; operational changes and expenditures due to climate change and sustainability related initiatives; disruption or interruption of our operations due to catastrophic 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 limitations on investment in oil and gas activities or negative outcomes within commodity and financial markets; liability resulting from environmental obligations and litigation, including heightened risks associated with being a general partner of 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” presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. “Net cash provided by (used in) operating activities before changes in operating assets and liabilities” presented in this release is defined as Net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by (used in) operating activities before changes in operating assets and liabilities demonstrates the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income or net cash provided by (used in) operating activities. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income, and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

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

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		Third Quarter 2022			Third Quarter 2021			Second Quarter 2022
Income Statement
Revenues and non-operating income
Sales and other operating revenues		$	3,122		$	1,759		$	2,955
Gains on asset sales, net			—			29			3
Other, net			35			23			30
Total revenues and non-operating income			3,157			1,811			2,988
Costs and expenses
Marketing, including purchased oil and gas			982			522			843
Operating costs and expenses			398			333			356
Production and severance taxes			72			42			67
Exploration expenses, including dry holes and lease impairment			58			36			33
General and administrative expenses			109			76			95
Interest expense			125			125			121
Depreciation, depletion and amortization			471			349			391
Impairment and other			54			—			—
Total costs and expenses			2,269			1,483			1,906
Income before income taxes			888			328			1,082
Provision for income taxes			282			143			328
Net income			606			185			754
Less: Net income attributable to noncontrolling interests			91			70			87
Net income attributable to Hess Corporation		$	515		$	115		$	667

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		Nine Months Ended September 30,
		2022			2021
Income Statement
Revenues and non-operating income
Sales and other operating revenues		$	8,390		$	5,236
Gains on asset sales, net			25			29
Other, net			101			63
Total revenues and non-operating income			8,516			5,328
Costs and expenses
Marketing, including purchased oil and gas			2,507			1,362
Operating costs and expenses			1,067			913
Production and severance taxes			200			123
Exploration expenses, including dry holes and lease impairment			134			117
General and administrative expenses			314			254
Interest expense			369			360
Depreciation, depletion and amortization			1,199			1,130
Impairment and other			54			147
Total costs and expenses			5,844			4,406
Income before income taxes			2,672			922
Provision for income taxes			807			388
Net income			1,865			534
Less: Net income attributable to noncontrolling interests			266			240
Net income attributable to Hess Corporation		$	1,599		$	294

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		September 30, 2022			December 31, 2021
Balance Sheet Information
Assets
Cash and cash equivalents		$	2,384		$	2,713
Other current assets			1,739			1,633
Property, plant and equipment – net			15,092			14,182
Operating lease right-of-use assets – net			461			352
Finance lease right-of-use assets – net			131			144
Other long-term assets			1,836			1,491
Total assets		$	21,643		$	20,515
Liabilities and equity
Current maturities of long-term debt		$	—		$	517
Current portion of operating and finance lease obligations			121			89
Other current liabilities			2,191			2,458
Long-term debt			8,303			7,941
Long-term operating lease obligations			461			394
Long-term finance lease obligations			185			200
Other long-term liabilities			2,188			1,890
Total equity excluding other comprehensive loss			7,889			6,706
Accumulated other comprehensive loss			(330)			(406)
Noncontrolling interests			635			726
Total liabilities and equity		$	21,643		$	20,515

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
								September 30, 2022			December 31, 2021
Total Debt
Hess Corporation								$	5,394		$	5,894
Midstream (a)									2,909			2,564
Hess Consolidated								$	8,303		$	8,458
(a) Midstream debt is non-recourse to Hess Corporation.
								September 30, 2022			December 31, 2021
Debt to Capitalization Ratio (a)
Hess Consolidated									50.9 %			55.3 %
Hess Corporation as defined in debt covenants									36.8 %			42.3 %
(a) Includes finance lease obligations.
		Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Interest Expense
Gross interest expense – Hess Corporation		$	88		$	97		$	266		$	286
Less: Capitalized interest – Hess Corporation			(3)			—			(6)			—
Interest expense – Hess Corporation			85			97			260			286
Interest expense – Midstream (a)			40			28			109			74
Interest expense – Hess Consolidated		$	125		$	125		$	369		$	360
(a) Midstream interest expense is reported in the Midstream operating segment.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		Third Quarter 2022			Third Quarter 2021			Second Quarter 2022
Cash Flow Information
Cash Flows from Operating Activities
Net income		$	606		$	185		$	754
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Gains) losses on asset sales, net			—			(29)			(3)
Depreciation, depletion and amortization			471			349			391
Impairment and other			54			—			—
Exploratory dry hole costs			19			2			—
Exploration lease and other impairment			4			5			4
Pension settlement loss			—			1			2
Stock compensation expense			17			17			16
Noncash (gains) losses on commodity derivatives, net			165			64			163
Provision for deferred income taxes and other tax accruals			69			37			136
Net cash provided by (used in) operating activities before changes in operating assets and liabilities			1,405			631			1,463
Changes in operating assets and liabilities			(66)			(16)			46
Net cash provided by (used in) operating activities			1,339			615			1,509
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P			(657)			(431)			(607)
Additions to property, plant and equipment - Midstream			(66)			(67)			(56)
Proceeds from asset sales, net of cash sold			—			130			4
Other, net			(4)			(2)			—
Net cash provided by (used in) investing activities			(727)			(370)			(659)
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or less			(48)			43			(14)
Debt with maturities of greater than 90 days:
Borrowings			20			750			400
Repayments			—			(503)			(5)
Cash dividends paid			(115)			(77)			(116)
Common stock acquired and retired			(150)			—			(190)
Proceeds from sale of Class A shares of Hess Midstream LP			—			—			146
Noncontrolling interests, net			(79)			(452)			(277)
Employee stock options exercised			4			—			7
Payments on finance lease obligations			(1)			(3)			(2)
Other, net			(18)			(14)			(10)
Net cash provided by (used in) financing activities			(387)			(256)			(61)
Net Increase (Decrease) in Cash and Cash Equivalents			225			(11)			789
Cash and Cash Equivalents at Beginning of Period			2,159			2,430			1,370
Cash and Cash Equivalents at End of Period		$	2,384		$	2,419		$	2,159
Additions to Property, Plant and Equipment included within Investing Activities
Capital expenditures incurred		$	(726)		$	(528)		$	(665)
Increase (decrease) in related liabilities			3			30			2
Additions to property, plant and equipment		$	(723)		$	(498)		$	(663)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		Nine Months Ended September 30,
		2022			2021
Cash Flow Information
Cash Flows from Operating Activities
Net income		$	1,865		$	534
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Gains) losses on asset sales, net			(25)			(29)
Depreciation, depletion and amortization			1,199			1,130
Impairment and other			54			147
Exploratory dry hole costs			19			11
Exploration lease and other impairment			14			15
Pension settlement loss			2			5
Stock compensation expense			66			61
Noncash (gains) losses on commodity derivatives, net			383			152
Provision for deferred income taxes and other tax accruals			243			79
Net cash provided by (used in) operating activities before changes in operating assets and liabilities			3,820			2,105
Changes in operating assets and liabilities			(1,128)			(114)
Net cash provided by (used in) operating activities			2,692			1,991
Cash Flows from Investing Activities
Additions to property, plant and equipment - E&P			(1,755)			(1,118)
Additions to property, plant and equipment - Midstream			(177)			(120)
Proceeds from asset sales, net of cash sold			28			427
Other, net			(4)			(4)
Net cash provided by (used in) investing activities			(1,908)			(815)
Cash Flows from Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or less			(61)			(32)
Debt with maturities of greater than 90 days:
Borrowings			420			750
Repayments			(510)			(508)
Cash dividends paid			(350)			(234)
Common stock acquired and retired			(340)			—
Proceeds from sale of Class A shares of Hess Midstream LP			146			70
Noncontrolling interests, net			(430)			(589)
Employee stock options exercised			44			75
Payments on finance lease obligations			(5)			(7)
Other, net			(27)			(21)
Net cash provided by (used in) financing activities			(1,113)			(496)
Net Increase (Decrease) in Cash and Cash Equivalents			(329)			680
Cash and Cash Equivalents at Beginning of Period			2,713			1,739
Cash and Cash Equivalents at End of Period		$	2,384		$	2,419
Additions to Property, Plant and Equipment included within Investing Activities
Capital expenditures incurred		$	(1,971)		$	(1,274)
Increase (decrease) in related liabilities			39			36
Additions to property, plant and equipment		$	(1,932)		$	(1,238)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
		Third Quarter 2022			Third Quarter 2021			Second Quarter 2022
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
North Dakota		$	226		$	169		$	188
Offshore and Other			57			16			72
Total United States			283			185			260
Guyana			301			264			286
Malaysia and JDA			92			42			66
Other			25			7			10
E&P Capital and exploratory expenditures		$	701		$	498		$	622
Total exploration expenses charged to income included above		$	35		$	29		$	29
Midstream Capital expenditures		$	60		$	59		$	72
					Nine Months Ended September 30,
					2022			2021
Capital and Exploratory Expenditures
E&P Capital and exploratory expenditures
United States
North Dakota					$	549		$	369
Offshore and Other						185			72
Total United States						734			441
Guyana						906			686
Malaysia and JDA						217			91
Other						46			18
E&P Capital and exploratory expenditures					$	1,903		$	1,236
Total exploration expenses charged to income included above					$	101		$	91
Midstream Capital expenditures					$	169		$	129

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
		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 attributable to Hess Corporation			$ 152	(b)		$	420	(c)		$	572
		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 for income taxes			—				140				140
Net income attributable to Hess Corporation		$	4	(d)		$	174	(e)		$	178

1. Includes amounts charged from the Midstream segment.
2. Includes after-tax losses from realized crude oil hedging activities of $100 million (noncash premium amortization: $100 million; cash settlement: $0 million).
3. Includes after-tax losses from realized crude oil hedging activities of $65 million (noncash premium amortization: $65 million; cash settlement: $0 million).
4. Includes after-tax losses from realized crude oil hedging activities of $50 million (noncash premium amortization: $50 million; cash settlement: $0 million).
5. 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)
		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				1				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				2				67
Midstream tariffs			296				—				296
Exploration expenses, including dry holes and lease impairment			24				9				33
General and administrative expenses			40				7				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 attributable to Hess Corporation		$	266	(b)		$	457	(c)		$	723

1. Includes amounts charged from the Midstream segment.
2. Includes after-tax losses from realized crude oil hedging activities of $99 million (noncash premium amortization: $99 million; cash settlement: $0 million).
3. 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)
		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 attributable to Hess Corporation		$	683	(b)		$	1,072	(c)		$	1,755
		Nine Months Ended September 30, 2021
Income Statement		United States				International				Total
Total revenues and non-operating income
Sales and other operating revenues		$	3,766			$	1,470			$	5,236
Gains on asset sales, net			—				29				29
Other, net			35				14				49
Total revenues and non-operating income			3,801				1,513				5,314
Costs and expenses
Marketing, including purchased oil and gas (a)			1,397				30				1,427
Operating costs and expenses			443				268				711
Production and severance taxes			119				4				123
Midstream tariffs			802				—				802
Exploration expenses, including dry holes and lease impairment			77				40				117
General and administrative expenses			118				22				140
Depreciation, depletion and amortization			757				250				1,007
Impairment and other			147				—				147
Total costs and expenses			3,860				614				4,474
Results of operations before income taxes			(59)				899				840
Provision for income taxes			—				379				379
Net income (loss) attributable to Hess Corporation		$	(59)	(d)		$	520	(e)		$	461

1. Includes amounts charged from the Midstream segment.
2. Includes after-tax losses from realized crude oil hedging activities of $256 million (noncash premium amortization: $233 million; cash settlement: $23 million).
3. Includes after-tax losses from realized crude oil hedging activities of $164 million (noncash premium amortization: $150 million; cash settlement: $14 million).
4. Includes after-tax losses from realized crude oil hedging activities of $140 million (noncash premium amortization: $140 million; cash settlement: $0 million).
5. Includes after-tax losses from realized crude oil hedging activities of $35 million (noncash premium amortization: $35 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Third Quarter 2022		Third Quarter 2021		Second Quarter 2022
Net Production Per Day (in thousands)
Crude oil - barrels
United States
North Dakota	79		78		68
Offshore	21		20		20
Total United States	100		98		88
Guyana (a)	98		32		67
Malaysia and JDA	4		3		4
Other (b)	15		20		17
Total	217		153		176
Natural gas liquids - barrels
United States
North Dakota	58		44		47
Offshore	2		3		2
Total United States	60		47		49
Natural gas - mcf
United States
North Dakota	176		158		147
Offshore	41		52		41
Total United States	217		210		188
Malaysia and JDA	320		284		381
Other (b)	10		9		11
Total	547		503		580
Barrels of oil equivalent	368		284		322

1. Production from Guyana includes 7,000 bopd of tax barrels in the third quarter of 2022. There were no tax barrels in the third quarter of 2021 or the second quarter of 2022.
2. Other includes production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 17,000 boepd in the third quarter of 2022, 19,000 boepd in the third quarter of 2021 and 19,000 boepd in the second quarter of 2022. Denmark net production was 3,000 boepd in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
	Nine Months Ended September 30,
	2022		2021
Net Production Per Day (in thousands)
Crude oil - barrels
United States
North Dakota	75		80
Offshore	20		30
Total United States	95		110
Guyana (a)	65		30
Malaysia and JDA	4		4
Other (b)	17		22
Total	181		166
Natural gas liquids - barrels
United States
North Dakota	51		48
Offshore	2		4
Total United States	53		52
Natural gas - mcf
United States
North Dakota	160		159
Offshore	42		77
Total United States	202		236
Malaysia and JDA	355		339
Other (b)	11		9
Total	568		584
Barrels of oil equivalent	329		315

1. Production from Guyana includes 2,000 bopd of tax barrels in the first nine months of 2022. There were no tax barrels in the first nine months of 2021.
2. Other includes production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 19,000 boepd in the first nine months of 2022 and 19,000 boepd in the first nine months of 2021. Denmark net production was 4,000 boepd in the first nine months of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
		Third Quarter 2022		Third Quarter 2021		Second Quarter 2022
Sales Volumes Per Day (in thousands) (a)
Crude oil – barrels		208		148		173
Natural gas liquids – barrels		58		47		46
Natural gas – mcf		547		503		580
Barrels of oil equivalent		357		279		316
Sales Volumes (in thousands) (a)
Crude oil – barrels		19,118		13,627		15,763
Natural gas liquids – barrels		5,299		4,338		4,180
Natural gas – mcf		50,343		46,317		52,811
Barrels of oil equivalent		32,807		25,685		28,745
				Nine Months Ended September 30,
				2022		2021
Sales Volumes Per Day (in thousands) (a)
Crude oil – barrels				174		177
Natural gas liquids – barrels				51		52
Natural gas – mcf				568		584
Barrels of oil equivalent				320		326
Sales Volumes (in thousands) (a)
Crude oil – barrels (b)				47,461		48,315
Natural gas liquids – barrels				14,018		14,282
Natural gas – mcf				155,052		159,387
Barrels of oil equivalent				87,321		89,162

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
		Third Quarter 2022			Third Quarter 2021			Second Quarter 2022
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
North Dakota		$	79.04		$	59.65		$	93.60
Offshore			78.80			62.23			95.22
Total United States			79.00			60.14			93.96
Guyana			92.02			70.05			104.19
Malaysia and JDA			85.23			69.87			106.21
Other (a)			87.90			68.36			105.21
Worldwide			85.32			63.17			99.16
Crude oil - per barrel (excluding hedging)
United States
North Dakota		$	89.80		$	65.11		$	106.01
Offshore			89.47			67.88			107.58
Total United States			89.74			65.64			106.37
Guyana			98.91			73.12			112.57
Malaysia and JDA			85.23			69.87			106.21
Other (a)			94.96			71.43			114.93
Worldwide			93.95			67.88			109.51
Natural gas liquids - per barrel
United States
North Dakota		$	35.41		$	32.94		$	40.96
Offshore			36.30			32.00			39.88
Worldwide			35.44			32.88			40.92
Natural gas - per mcf
United States
North Dakota		$	6.67		$	3.75		$	6.89
Offshore			8.12			3.76			7.63
Total United States			6.94			3.75			7.06
Malaysia and JDA			5.07			5.45			6.18
Other (a)			7.03			3.62			5.36
Worldwide			5.85			4.71			6.45

1. Other includes prices related to production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION OPERATING DATA
		Nine Months Ended September 30,
		2022			2021
Average Selling Prices
Crude oil - per barrel (including hedging)
United States
North Dakota (a)		$	85.39		$	52.27
Offshore			86.13			57.36
Total United States			85.56			53.46
Guyana			96.24			65.31
Malaysia and JDA			93.16			64.94
Other (b)			95.49			62.93
Worldwide			90.30			56.62
Crude oil - per barrel (excluding hedging)
United States
North Dakota (a)		$	95.33		$	56.37
Offshore			95.96			61.91
Total United States			95.47			57.66
Guyana			103.94			67.72
Malaysia and JDA			93.16			64.94
Other (b)			104.67			65.91
Worldwide			99.14			60.33
Natural gas liquids - per barrel
United States
North Dakota		$	38.51		$	28.59
Offshore			37.86			24.08
Worldwide			38.48			28.23
Natural gas - per mcf
United States
North Dakota		$	5.97		$	3.96
Offshore			6.71			2.91
Total United States			6.13			3.62
Malaysia and JDA			5.72			5.22
Other (b)			5.65			3.05
Worldwide			5.86			4.54

1. Excluding the two VLCC cargo sales totaling 4.2 million barrels sold in the first quarter of 2021, the North Dakota crude oil price excluding hedging was $59.99 per barrel and $55.29 per barrel including hedging.
2. Other includes prices related to production from Libya and the Corporation's former interests in Denmark, which were sold in the third quarter of 2021.

   The following is a summary of the Corporation’s outstanding commodity hedging program for the remainder of calendar 2022:

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005015/en/

For Hess Corporation

Investors:

Jay Wilson

(212) 536-8940

Media:

Lorrie Hecker

(212) 536-8250

Jamie Tully

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(917) 679-7908

Source: Hess Corporation

FAQ

What are Hess Corporation's third-quarter 2022 earnings per share (EPS)?

Hess Corporation reported an EPS of $1.67 for Q3 2022, compared to $0.37 in Q3 2021.

How much net income did Hess Corporation achieve in Q3 2022?

Hess Corporation's net income for Q3 2022 was $515 million.

What discoveries did Hess Corporation make in the Stabroek Block in Q3 2022?

Hess Corporation announced the Yarrow-1 and Sailfin-1 discoveries in the Stabroek Block in Q3 2022.

What was the total cash returned to shareholders by Hess Corporation in Q3 2022?

In Q3 2022, Hess Corporation returned $265 million to shareholders through dividends and share repurchases.

How did Hess Corporation's production change in Q3 2022 compared to Q3 2021?

Hess Corporation's oil and gas net production increased by 32% to 351,000 boepd in Q3 2022.