Hess Takes a Hit in 2Q Financial Results

Hess reported net income of $100 million for the second quarter of 2009 compared with net income of $900 million for the second quarter of 2008.

Exploration and Production earnings were $215 million in the second quarter of 2009 compared with $1,025 million in the second quarter of 2008. Second quarter 2009 results include dry hole costs of $153 million ($92 million after-tax), primarily associated with a well offshore Brazil and two wells in the Gulf of Mexico. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 407,000 barrels per day in the second quarter of 2009, an increase of 4% from the second quarter of 2008. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $49.27 per barrel in the second quarter of 2009 compared with $104.29 per barrel in the second quarter of 2008. The Corporation’s average worldwide natural gas selling price was $4.56 per Mcf in the second quarter of 2009 compared with $7.81 per Mcf in the second quarter of 2008.

In the second quarter of 2009, the Corporation recorded after-tax charges of $31 million to reduce the carrying value of production equipment in the United Kingdom North Sea and materials inventory in Equatorial Guinea and the United States.

Net cash provided by operating activities was $616 million in the second quarter of 2009 compared with $1,732 million in the second quarter of 2008. Capital and exploratory expenditures for the second quarter of 2009 amounted to $785 million, of which $770 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2008 amounted to $1,240 million, of which $1,205 million related to Exploration and Production operations.

At June 30, 2009, cash and cash equivalents totaled $1,063 million compared with $908 million at December 31, 2008. Total debt was $4,313 million at June 30, 2009 and $3,955 million at December 31, 2008. The Corporation’s debt to capitalization ratio at June 30, 2009 was 25.8 percent compared with 24.2 percent at the end of 2008.
 

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