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Hess Reports Estimated Results For The Fourth Quarter Of 2013

Stocks in this article: HES

Hess Corporation (NYSE: HES) today reported net income of $1,925 million for the quarter ended December 31, 2013. Adjusted earnings, which excludes items affecting comparability, were $319 million or $0.96 per common share compared with $409 million or $1.20 per share in the prior year quarter, reflecting a decrease of $97 million in adjusted downstream earnings, partially offset by a $5 million increase in adjusted Exploration and Production earnings. Subsequent to our interim update of operating data for the first two months of the fourth quarter, a third party operated pipeline in the Gulf of Mexico was shut down on December 18 th, which reduced our production and sales volumes by approximately 35,000 boepd through the end of the quarter and impacted fourth quarter after-tax income by an estimated $20 million.

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


Three Months EndedDecember 31,(unaudited)

Years EndedDecember 31,(unaudited)







(In millions, except per share amounts)

Net Income (Loss) Attributable to Hess Corporation

Exploration and Production $ 1,029 $ 325 $ 4,303 $ 2,212
Corporate and Interest (115) (110) (440) (418)
Downstream Businesses   1,011   159   1,189   231
Net income attributable to Hess Corporation $ 1,925 $ 374 $ 5,052 $ 2,025
Net income per share (diluted) $ 5.76 $ 1.10 $ 14.82 $ 5.95

Adjusted Earnings (Losses)

Exploration and Production $ 436 $ 431 $ 2,192 $ 2,256
Corporate and Interest (108) (110) (416) (418)
Downstream Businesses   (9)   88   116   160
Adjusted earnings attributable to Hess Corporation $ 319 $ 409 $ 1,892 $ 1,998
Adjusted earnings per share (diluted) $ 0.96 $ 1.20 $ 5.55 $ 5.87
Weighted average number of shares (diluted)   334.3   340.5   340.9   340.3
      Note: See page 7 for a table of items affecting comparability of earnings between periods.

John Hess, Chief Executive Officer, said: “In March 2013, we announced a detailed plan to complete our transformation into a pure play E&P company, fully exit the downstream, strengthen financial flexibility, and increase cash returns to our shareholders. By any measure, our progress has been remarkable. We generated $7.8 billion in total proceeds from asset sales, paid down $2.4 billion of short term debt, funded our $1 billion cash flow deficit and added approximately $1 billion of cash to the balance sheet as a cushion against future commodity price volatility. We also began a $4 billion share repurchase program – purchasing $1.54 billion through December 31 - and raised our annual dividend by 150 percent to $1 per share.”

He continued: “We have entered 2014 with terrific momentum. Based on strong operational execution across our balanced portfolio, including the Bakken where we are increasing peak production guidance, we remain confident that we will deliver long-term, cash-generative growth by achieving 5 - 8 percent compound average production growth through 2017 from the 2012 pro forma.”

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