The Rising Influence of Rising Affluence

[DewDiligence]

HES Increases 2010 Capital Budget 22% vs 2009

[Essentially all of the budgeted $3.9B in 2010 is for E&P and 20-25% of it is for exploration. HES’ refining, marketing, and convenience-store operations are the unglamorous cash cows that enable HES to fund its high-profile upstream programs.]

http://finance.yahoo.com/news/Hess-Corporation-Announces-bw-3968168769.html?x=0&.v=1

›11:30 am EST, Monday December 14, 2009

NEW YORK--(BUSINESS WIRE)--Hess Corporation (NYSE: HES) announced today a $3.9 billion capital and exploratory budget for 2010, nearly all of which is targeted for Exploration and Production: $2.4 billion for production, $600 million for developments and $850 million for exploration.

John B. Hess, Chairman and CEO, stated, “We are fortunate to have a strong portfolio of attractive investment opportunities. We will invest in a disciplined manner to sustain long-term profitable growth for shareholders and expect to fund our 2010 program from internally generated cash flow.”

Greg Hill, President of Worldwide Exploration and Production, said, “We have a balanced Exploration and Production plan that is consistent with our long-term target of growing both reserves and production 3 percent per year.”

Production expenditures of approximately $2.4 billion include:

• Bakken Shale development in North Dakota, where Hess plans to increase rig count to eight by year-end 2010 from three currently and expand production facilities, including the Tioga gas plant

• Drilling production wells at Okume Complex (Hess 85% working interest - operator) in Equatorial Guinea

• Drilling production wells at Shenzi (Hess 28%) in the deepwater Gulf of Mexico, Beryl (Hess 22%) in the United Kingdom, and Valhall (Hess 28%) in Norway

Field-development expenditures of $600 million include:

• Valhall, where field redevelopment is underway

• Ujung Pangkah (Hess 75% - operator) in Indonesia, where development of the oil rim is ongoing

• Pony (Hess 100% - operator) in the deepwater Gulf of Mexico, where engineering and design work for field development is progressing

Exploration expenditures are budgeted at $850 million, including:

• Five exploration wells on Permit WA-390-P (Hess 100% - operator) and eight wells on Permit WA-404-P (Hess 50%) in the Northwest Shelf of Australia

• One exploration well on BM-S-22 (Hess 40%) in the Santos Basin of Brazil [this is where partner XOM drilled a dry hole in mid 2009]

• Exploration activities in the deepwater Gulf of Mexico, Ghana and Indonesia


2010 Estimated Capital and Exploratory Expenditures
($ Millions)

E&P Segment ; E&P Region
Production 2,400; United States 1,700
Development 600; Europe 850
Exploration 850; Africa 500
........................... Asia/Other 800

Total E&P 3,850

Marketing and Refining 50
Corporate 20
======================
Total 3,920

Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. More information on Hess Corporation is available at www.hess.com.‹