Hess Reports $510M Net Income in Initial Estimate for Q4 '07

Hess Corporation reported net income of $510 million for the fourth quarter of 2007 compared with net income of $359 million for the fourth quarter of 2006.

Exploration and production earnings were $583 million in the fourth quarter of 2007 compared with $350 million in the fourth quarter of 2006. The corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 390,000 barrels per day in the fourth quarter of 2007, an increase of 24,000 from the fourth quarter of 2006. In the fourth quarter of 2007, the corporation's average worldwide crude oil selling price, including the effect of hedging, was $76.11 per barrel, an increase of $25.35 per barrel from the fourth quarter of 2006. The corporation's average worldwide natural gas selling price was $6.93 per Mcf in the fourth quarter of 2007, an increase of $1.68 from the fourth quarter of 2006.

Oil and gas proved reserves increased to 1,330 million barrels of oil equivalent at the end of 2007 from 1,243 million barrels at the end of 2006. During 2007, the corporation added 234 million new barrels of oil equivalent to proved reserves. These additions, which are subject to final review, replaced approximately 167 percent of the corporation's 2007 production and increased its reserve life to 9.5 years.

In the fourth quarter of 2007, the corporation recorded an after-tax charge of $56 million related to asset impairments at two mature fields in the U.K. North Sea, income of $24 million due to the partial liquidation of prior year LIFO inventories and a charge of $25 million related to MTBE litigation.

Net cash provided by operating activities was $3,507 million for the year 2007 compared with $3,491 million for the year 2006. Capital and exploratory expenditures for 2007 were $3,926 million, of which $3,786 million related to exploration and production operations. Capital and exploratory expenditures for 2006 were $4,056 million.

At Dec. 31, 2007, cash and cash equivalents totaled $607 million compared with $383 million at December 31, 2006. Total debt was $3,980 million at December 31, 2007 and $3,772 million at December 31, 2006. The Corporation's debt to capitalization ratio at December 31, 2007 was 28.9 percent compared with 31.6 percent at the end of 2006.