The Rising Influence of Rising Affluence

[DewDiligence]

Notes from HES 3Q13 CC (held on 10/30/13):

• 2013 cumulative divestitures to date: $6.3B.

• Four large divestitures remain: i) retail service stations and convenience stores (“Hess Express”); ii) trading business, iii) upstream operations in Indonesia; and iv), upstream operations in Thailand.

• 2013 cumulative share buybacks to date: 11.2M shares for $885M.

• Bakken production in 3Q13: 71K boe/d, +14% YoY. (2013 full-year guidance remains 64-70K boe/d.)

• Bakken drilling cost per well continues to decline; in 3Q13, avg well cost was $7.8M, -18% YoY, and -7% QoQ.

• Tubular Bells (GoM) is on track to produce 25K boe/d in 3Q14 (taking into account HES’ 57% stake). These will be very high-margin barrels!

• Future guidance includes zero contribution from Libya due to renewed political instability there.