Hess Reports Lower Net Income for Third Quarter 2009

Hess Corporation reported net income of $341 million for the third quarter of 2009 compared with net income of $775 million for the third quarter of 2008.

Exploration and Production earnings were $397 million in the third quarter of 2009 compared with $699 million in the third quarter of 2008. The Corporation’s oil and gas production was 420,000 barrels of oil equivalent per day in the third quarter of 2009, an increase of 16% from the third quarter of 2008. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $56.07 per barrel in the third quarter of 2009 compared with $93.36 per barrel in the third quarter of 2008. The Corporation’s average worldwide natural gas selling price was $4.60 per Mcf in the third quarter of 2009 compared with $7.60 per Mcf in the third quarter of 2008.

In the third quarter of 2009, the Corporation recorded after-tax income of $89 million related to the resolution of a royalty dispute on production from certain leases subject to the U.S. Deep Water Royalty Relief Act. The Corporation also recorded a benefit of $12 million due to an income tax adjustment relating to refining operations.

Net cash provided by operating activities was $534 million in the third quarter of 2009 compared with $1,205 million in the third quarter of 2008. Capital and exploratory expenditures for the third quarter of 2009 amounted to $668 million, of which $646 million related to Exploration and Production operations. 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.

At September 30, 2009, cash and cash equivalents totaled $957 million compared with $908 million at December 31, 2008. Total debt was $4,379 million at September 30, 2009 and $3,955 million at December 31, 2008. The Corporation’s debt to capitalization ratio at September 30, 2009 was 25.2 percent compared with 24.2 percent at the end of 2008.