Replies to post #2585 on The Rising Influence of Rising Affluence

[OilStockReport]

I like all the talk about the Bakken. I think this will be big for numerous companies.

[DewDiligence]

Bakken—#msg-62518973 has an unanswered question in the second-to-last bullet point. If no one on this board has a clue, I may have to test the expertise of HES’ IR department :- )

[DewDiligence]

HES Confirms Paradise-1 Discovery Offshore Ghana

http://finance.yahoo.com/news/Hess-Confirms-Paradise1-bw-883288106.html?x=0&.v=1

Tuesday June 7, 2011, 7:30 am EDT

NEW YORK--(BUSINESS WIRE)-- Hess Corporation (NYSE:HES) announced today that it has filed a Notice of Discovery with the Minister for Energy of Ghana for the Paradise-1 exploration well in the Deepwater Tano / Cape Three Points license, offshore Ghana. The well encountered an estimated 490 net feet of oil and gas condensate pay over three separate intervals.

The well was drilled to a total depth of 16,436 feet in a water depth of 6,038 feet. Hess is the operator and has a 90 percent interest in the license, with Ghana National Petroleum Corporation (GNPC) holding the remaining 10 percent.

Hess will evaluate the well results and work with GNPC and the government of Ghana to plan future appraisal drilling.‹

[DewDiligence]

HES Reports 2Q11 Results

[This quarter had some bad stuff on both the upstream and downstream sides. Production slipped 7% QoQ to 372K boe/d from 399K boe/d in 1Q11. (2Q10 production of 415K boe/d was prior to the suspension of operations in Libya and HES’ sale of North Sea assets.) In the Bakken shale, HES’ 2Q11 production was 25K boe/d 2Q11, flat vs 1Q11, but it is at 34K boe/d now, according to the 2Q11 CC; HES expects its Bakken production to reach 40K boe/d by the end of 2011. Bakken output is worth tracking because it is likely the most profitable production in HES’ entire portfolio, despite its characterization as an “unconventional” play.

HES’ downstream businesses lost $39M during 2Q11 due to weak refining margins and a fire at the Hovensa refinery that shut down the distillate unit for much of the quarter. (Because its refineries reside on the East Coast, HES does not benefit from the low price of WTI relative to Brent crude as US refiners in the rest of the country do.) Despite the GAAP loss from downstream ops, HES’ downstream businesses (including the convenience stores) generate a lot of cash to fund HES’ aggressive exploration program.

All told, the market reacted negatively to the 2Q11 report today, sending shares down about 4%; however, HES is a high-beta stock and the S&P500 is down sharply today, so it’s hard to say how much of the drop is company-specific.]

http://finance.yahoo.com/news/Hess-Reports-Estimated-bw-2835490193.html?x=0&.v=1

›Wednesday July 27, 2011, 7:30 am

• Net income was $607 million, up from $375 million in the second quarter of 2010
• Net cash provided by operating activities was $1,689 million, up from $981 million in the second quarter of 2010
• Oil and gas production was 372,000 barrels of oil equivalent per day, compared with 415,000 in the second quarter of 2010
• Capital and exploratory expenditures were $1,490 million, up from $963 million in the second quarter of 2010

NEW YORK--(BUSINESS WIRE)-- Hess Corporation (NYSE:HES) reported net income of $607 million for the second quarter of 2011 up from $375 million for the second quarter of 2010. The after-tax income (loss) by major operating activity was as follows:



Exploration and Production earnings were $747 million in the second quarter of 2011 up from $488 million in the second quarter of 2010. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $97.20 per barrel, up from $64.81 per barrel in the second quarter of 2010. The average worldwide natural gas selling price was $5.93 per Mcf in the second quarter of 2011 compared with $5.57 per Mcf in the same quarter a year ago.

The Corporation’s second quarter oil and gas production was 372,000 barrels of oil equivalent per day, compared with 415,000 barrels of oil equivalent per day in the second quarter a year ago, due to lower production from Africa, primarily reflecting the suspension of production in Libya due to civil unrest, and the sale of certain natural gas producing assets in the United Kingdom North Sea in February 2011.

Marketing and Refining generated a loss of $39 million in the second quarter of 2011 compared with a loss of $19 million in the same period in 2010. Refining operations incurred a loss of $44 million in the second quarter of 2011 compared with a loss of $31 million in the second quarter a year ago. Marketing earnings were $28 million, up from $17 million in the second quarter of 2010. Trading activities generated a loss of $23 million in the second quarter of 2011 compared with a loss of $5 million in the second quarter of last year.

Net cash provided by operating activities was $1,689 million in the second quarter of 2011, up from $981 million in the same quarter of 2010. Capital and exploratory expenditures were $1,490 million, of which $1,469 million related to Exploration and Production operations. Capital and exploratory expenditures for the second quarter of 2010 were $963 million, of which $930 million related to Exploration and Production operations.

At June 30, 2011, cash and cash equivalents totaled $2,194 million up from $1,608 million at December 31, 2010. Total debt was $5,541 million at June 30, 2011 and $5,583 million at December 31, 2010. The Corporation’s debt to capitalization ratio at June 30, 2011 improved to 22.7 percent [this is about where they want it to be] compared with 24.9 percent at the end of 2010.

Hess Corporation will review second quarter financial and operating results and other matters on a webcast at 10 a.m. today. For details about the event, refer to the Investor Relations section of our website at www.hess.com.

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.‹