Hess Touts $1.15B Profit in 3Q10



Hess reported net income of $1.15B for the third quarter of 2010 compared with net income of $341 million for the third quarter of 2009.

Exploration and Production earnings were $1,277 million in the third quarter of 2010 up from $397 million in the third quarter of 2009. Third quarter oil and gas production was 413,000 barrels of oil equivalent per day, compared with 420,000 barrels of oil equivalent per day in the third quarter a year ago. The Corporation's average worldwide crude oil selling price, including the effect of hedging, was $64.81 per barrel compared with $56.07 per barrel in the third quarter of 2009. The average worldwide natural gas selling price was $5.73 per Mcf in the third quarter of 2010 compared with $4.60 per Mcf in the same quarter a year ago.

Marketing and Refining generated a loss of $38 million in the third quarter of 2010 compared with income of $38 million in the same period of 2009. Refining operations incurred losses of $50 million compared with $3 million in the third quarter a year ago as a result of lower refining margins. Marketing earnings were $40 million, an increase of $5 million from the third quarter of 2009. Trading activities generated a loss of $28 million, compared with income of $6 million in the third quarter of last year.

Third quarter 2010 results included an after-tax gain of $1,072 million related to the exchange of the Corporation's interests in Gabon and the Clair Field in the United Kingdom for a 28.1 percent interest in the Valhall Field and a 25.0 percent interest in the Hod Field, both in Norway. The results also included an after-tax charge of $347 million to fully impair the carrying value of the Corporation's interests in the West Med Block 1 Concession, located offshore Egypt.

Net cash provided by operating activities was $1,246 million in the third quarter of 2010, compared with $534 million in the same quarter of 2009. Capital and exploratory expenditures were $1,567 million, of which $1,548 million related to Exploration and Production operations. In September 2010, the Corporation acquired, for cash of $507 million, a 7.9 percent interest in the Valhall Field and a 12.5 percent in the Hod Field. Capital and exploratory expenditures for the third quarter of 2009 were $668 million, of which $646 million related to Exploration and Production operations.

At September 30, 2010, cash and cash equivalents totaled $2,353 million compared with $1,362 million at December 31, 2009. Total debt was $5,584 million at September 30, 2010 and $4,467 million at December 31, 2009. In August 2010, the Corporation issued $1.25 billion of 30 year unsecured notes with a coupon of 5.60 percent. The Corporation's debt to capitalization ratio at September 30, 2010 was 26.1 percent compared with 24.8 percent at the end of 2009.


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