Hess Nearly Doubles Income in Third Quarter

Hess reported net income of $775 million for the third quarter of 2008 compared with net income of $395 million for the third quarter of 2007.

Exploration and Production earnings were $699 million in the third quarter of 2008 compared with $414 million in the third quarter of 2007. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, increased to 361,000 barrels per day in the third quarter of 2008 from 357,000 barrels per day in the third quarter of the prior year. In the third quarter of 2008, the Corporation’s average worldwide crude oil selling price, including the effect of hedging, improved to $93.36 per barrel from $65.26 per barrel in the third quarter of 2007.

The Corporation's average worldwide natural gas selling price, including the effect of hedging, was $7.60 per Mcf in the third quarter of 2008 compared with $5.38 per Mcf in the third quarter of the prior year.

Marketing and Refining earnings were $161 million in the third quarter of 2008 compared with $46 million in the third quarter of 2007, primarily reflecting higher margins. Refining earnings increased to $46 million in the third quarter of 2008 compared with $25 million in the third quarter of the prior year. Marketing earnings were $110 million in the third quarter of 2008 up from $21 million in the third quarter of 2007. Trading operations generated income of $5 million in the third quarter of 2008 compared with breakeven results in the same quarter of 2007.

Net cash provided by operating activities was $1,205 million in the third quarter of 2008 compared with $863 million in the third quarter of 2007. Capital and exploratory expenditures for the third quarter of 2008 amounted to $1,368 million, of which $1,338 million related to Exploration and Production operations. Capital and exploratory expenditures for the third quarter of 2007 amounted to $838 million, of which $800 million related to Exploration and Production operations.

At September 30, 2008, cash and cash equivalents totaled $1,380 million compared with $607 million at December 31, 2007. Total debt was $3,932 million at September 30, 2008 and $3,980 million at December 31, 2007. The Corporation's debt to capitalization ratio at September 30, 2008 was 24.3 percent compared with 28.9 percent at the end of 2007.

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