Hess Reports Estimated Results for the Third Quarter of 2006

Hess Corporation (NYSE: HES) reported net income of $297 million for the third quarter of 2006 compared with net income of $272 million for the third quarter of 2005. The third quarter 2006 results include a $105 million charge related to a United Kingdom supplementary tax enacted in July 2006.

Exploration and Production earnings were $206 million in the third quarter of 2006 compared with $235 million in the third quarter of 2005. Third quarter 2006 results include dry hole costs of $152 million ($93 million after tax), primarily associated with two deepwater Gulf of Mexico exploration wells. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 352,000 barrels per day in the third quarter of 2006 compared with 312,000 barrels per day in the third quarter of 2005.

In the third quarter of 2006, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $58.81 per barrel, an increase of $23.07 per barrel from the third quarter of 2005. The increase reflects higher crude oil prices and reduced hedge positions in 2006. The Corporation's average worldwide natural gas selling price was $4.94 per Mcf in the third quarter of 2006, compared to $5.26 per Mcf in the third quarter of 2005.

Marketing and Refining earnings were $153 million in the third quarter of 2006 compared with $125 million in the third quarter of 2005. Marketing earnings increased to $63 million in the third quarter of 2006 compared with a loss of $22 million in the same period of 2005, primarily reflecting stronger margins. Refining earnings decreased to $64 million in the third quarter of 2006 compared with $144 million in the third quarter of 2005 principally reflecting lower refined product margins. Earnings from trading operations were $26 million in third quarter of 2006 compared to $3 million in third quarter of 2005.

The following items, on an after-tax basis, are included in net income (in millions):

                                 Three months ended  Nine months ended
                                    September 30       September 30
                                 ------------------  -----------------
                                   2006     2005      2006     2005
                                 --------- --------  -------- --------
Exploration and Production
--------------------------------
    Gains from asset sales             $-       $-      $236      $11
    Income tax adjustments           (105)       -       (45)      11
    Accrued office closing costs        -        -       (18)       -
    Hurricane related costs             -      (14)        -      (14)
    Legal settlement                    -        -         -       11
Corporate
--------------------------------
    Tax on repatriated earnings         -      (31)        -      (72)
    Premiums on bond repurchases        -        -         -       (7)
                                 --------- --------  -------- --------

                                    $(105)    $(45)     $173     $(60)
                                 ========= ========  ======== ========

In the third quarter of 2006 the United Kingdom enacted a 10% supplementary tax on petroleum operations with an effective date of January 1, 2006. As a result, the Corporation recorded a charge of $105 million consisting of an incremental income tax of $60 million on operating earnings for the first half of 2006 and $45 million to adjust the United Kingdom deferred tax liability.

The gain from asset sales for the nine months ended September 30, 2006 relates to the sale of certain United States producing properties located in the Permian Basin and Gulf Coast. The results for the first nine months of 2006 also include a charge for vacated leased office space.

Capital and exploratory expenditures for the third quarter of 2006 amounted to $830 million of which $783 million related to Exploration and Production activities. Capital and exploratory expenditures for the third quarter of 2005 amounted to $699 million, including $674 million for Exploration and Production.

At September 30, 2006, cash and cash equivalents totaled $546 million compared with $315 million at December 31, 2005. The Corporation's debt to capitalization ratio at September 30, 2006 was 32.8% compared with 37.6% at the end of 2005. Total debt was $3,775 million at September 30, 2006 and $3,785 million at December 31, 2005.

The after-tax results by major operating activity were as follows:

                                 Three months ended  Nine months ended
                                   September 30        September 30
                                     (unaudited)        (unaudited)
                                 ------------------  -----------------
                                   2006     2005      2006     2005
                                 --------- --------  -------- --------
                                    (In millions, except per share
                                                amounts)

Exploration and Production           $206     $235    $1,413     $760
Marketing and Refining                153      125       323      286
Corporate                             (31)     (54)      (83)    (151)
Interest expense                      (31)     (34)      (96)    (105)
                                 --------- --------  -------- --------

Net income                           $297     $272    $1,557     $790
                                 ========= ========  ======== ========

Net income per share (diluted)*     $0.94    $0.87     $4.93    $2.54
                                 ========= ========  ======== ========

Weighted average number of
 shares (diluted)*                  316.0    313.2     315.5    311.4
                                 ========= ========  ======== ========

* Weighted average number of shares and per-share amounts in all periods reflect the impact of the 3-for-1 stock split on May 31, 2006.

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