Hess Releases Estimated Fourth Quarter Results

Hess has reported a net loss of $74 million for the fourth quarter of 2008 compared with net income of $510 million for the fourth quarter of 2007.

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

Exploration and Production generated a loss of $125 million in the fourth quarter of 2008 compared with income of $583 million in the fourth quarter of 2007. Fourth quarter 2008 results included after-tax dry hole costs of $86 million, foreign exchange losses of $84 million and net income tax charges of $20 million. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, was 379,000 barrels per day in the fourth quarter of 2008 compared with 390,000 barrels per day in the fourth quarter of the prior year. Production in the fourth quarter of 2008 was reduced by 19,000 barrels per day due to hurricane impacts. In the fourth quarter of 2008, the Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $45.00 per barrel compared with $76.11 per barrel in the fourth quarter of 2007. The Corporation’s average worldwide natural gas selling price, including the effect of hedging, was $6.26 per Mcf in the fourth quarter of 2008 compared with $6.93 per Mcf in the fourth quarter of the prior year.

Oil and gas proved reserves increased to 1,432 million barrels of oil equivalent at the end of 2008 from 1,330 million barrels at the end of 2007. During 2008, the Corporation added 244 million barrels of oil equivalent to proved reserves. These additions, which are subject to final review, replaced approximately 171 percent of the Corporation's 2008 production and increased its reserve life to 10.0 years.

In the fourth quarter of 2008, the Corporation recorded after-tax charges of $17 million related to asset impairments at fields located in the United States and U.K. North Sea. Also during the fourth quarter of 2008, the Corporation recorded after-tax charges of $9 million associated with Hurricanes Gustav and Ike in the Gulf of Mexico.

Net cash provided by operating activities was $4,567 million for the year 2008 compared with $3,507 million for the year 2007. Capital and exploratory expenditures for 2008 amounted to $4,828 million, of which $4,641 million related to Exploration and Production operations. Capital and exploratory expenditures for 2007 amounted to $3,926 million.

At December 31, 2008, cash and cash equivalents totaled $908 million compared with $607 million at December 31, 2007. Total debt was $3,955 million at December 31, 2008 and $3,980 million at December 31, 2007. The Corporation’s debt to capitalization ratio at December 31, 2008 was 24.3 percent compared with 28.9 percent at the end of 2007.
 

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