Replies to post #3205 on The Rising Influence of Rising Affluence

[DewDiligence]

HES 2Q11 addendum re Bakken: HES expects to make up some of the 2Q11 lost Bakken production due to the severe flooding in North Dakota by stepping up production during the second half of the year, thanks in part to a new “38 stage” fracking plan. The 38 frack stages in the Bakken consist of 22 sliding sleeve stages and 16 plug & perf stages. (I don’t know enough about fracking to understand why this level of detail is important.)

With the Bakken step-up during 2H11, HES expects Bakken production to average 30-35K boe/d for the full year, which implies a year-end run rate >40K boe/d. HES’ old guidance for 2015 Bakken production of 80K boe/d is now clearly too low, according to today’s CC. HES will give updated 2015 Bakken guidance in late 2011 or early 2012.

HES’ overall production guidance for the 2011 year is now 375-385K boe/d (down from the prior guidance of 385-395K boe/d). The reduction comes almost entirely from the weather-related shortfall in the Bakken during 2Q11. (The Libya shut-in was already baked into the old 2011 forecast.)

[DewDiligence]

HES director John Mullin bought $545K worth of stock (10K shares at $54.87) on 8/9/11:

http://www.sec.gov/Archives/edgar/data/4447/000120919111043503/xslF345X03/doc4.xml

[DewDiligence]

HES Reports 3Q11 Results

[For archival purposes—this PR was issued in late October.]

http://ih.advfn.com/p.php?pid=nmona&article=49673573

›October 26, 2011, 7:30 am EDT

• Net income was $298 million, compared with $1,154 million in the third quarter of 2010

• Net income excluding items affecting comparability between periods was $379 million, compared with $429 million in the third quarter of 2010

• Net cash provided by operating activities was $1,022 million, down from $1,246 million in the third quarter of 2010

• Oil and gas production was 344,000 barrels of oil equivalent per day, compared with 413,000 in the third quarter of 2010

• Capital and exploratory expenditures were $2,550 million, including $902 million for acquisitions, up from $1,567 million in the third quarter of 2010

NEW YORK--(BUSINESS WIRE)-- Hess Corporation (NYSE:HES) reported net income of $298 million for the third quarter of 2011 compared with $1,154 million for the third quarter of 2010. The after-tax income (loss) by major operating activity was as follows:

[Table omitted—see actual PR.]

Exploration and Production earnings were $422 million in the third quarter of 2011 compared with $1,277 million in the third quarter of 2010. The Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $85.81 per barrel, up from $64.81 per barrel in the third quarter of 2010. The average worldwide natural gas selling price of $5.74 per Mcf in the third quarter of 2011 was comparable with the selling price for the same quarter a year ago. Third quarter oil and gas production was 344,000 barrels of oil equivalent per day, down from 413,000 barrels of oil equivalent per day in the third quarter a year ago, due to production interruptions in Libya and at the Valhall and Llano fields, the sale of certain natural gas assets in the United Kingdom North Sea in February and natural field declines, partially offset by higher production from the Bakken oil shale play in North Dakota.

Marketing and Refining generated a loss of $23 million in the third quarter of 2011 compared with a loss of $38 million in the same period in 2010. Refining operations incurred a loss of $38 million in the third quarter of 2011 compared with a loss of $50 million in the year ago quarter. Marketing earnings of $41 million were comparable to the earnings for the third quarter of 2010. Trading activities generated a loss of $26 million in the third quarter of 2011 and a loss of $28 million in the third quarter of last year.

The following table reflects the total after-tax income (expense) of items affecting the comparability of earnings between periods:

[Table omitted—see actual PR.]

Third quarter 2011 results include after-tax impairment charges of $140 million that resulted from increases to the Corporation’s abandonment liabilities, primarily for non-producing properties. A charge of $44 million was also recorded as a result of the third quarter enactment of an additional 12 percent supplementary tax on petroleum operations in the United Kingdom with an effective date of March 24, 2011. The charge consists of incremental income tax of $15 million on earnings from the effective date to the end of the second quarter and a charge of $29 million to increase the United Kingdom deferred tax liability. The results also include after-tax gains of $103 million from the sales of the Corporation’s interests in the Snorre Field, offshore Norway, and the Cook Field in the United Kingdom North Sea.

Net cash provided by operating activities was $1,022 million in the third quarter of 2011, compared with $1,246 million in the same quarter of 2010. Capital and exploratory expenditures were $2,550 million, of which $2,517 million related to Exploration and Production operations, including $902 million for acreage acquisitions in the Utica Shale play in eastern Ohio and in the Kurdistan region of Iraq. Capital and exploratory expenditures for the third quarter of 2010 were $1,567 million, of which $1,548 million related to Exploration and Production operations.

At September 30, 2011, cash and cash equivalents totaled $827 million compared with $1,608 million at December 31, 2010. Total debt was $5,592 million at September 30, 2011 and $5,583 million at December 31, 2010. The Corporation’s debt to capitalization ratio at September 30, 2011 was 22.8 percent compared with 24.9 percent at the end of 2010.

Hess Corporation will review third 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.‹