EX-99.1 2 a5003829ex99_1.txt EXHIBIT 99.1 - PRESS RELEASE Exhibit 99.1 Amerada Hess Reports Estimated Results for the Third Quarter of 2005 NEW YORK--(BUSINESS WIRE)--Oct. 26, 2005--Amerada Hess Corporation (NYSE:AHC) reported net income of $272 million for the third quarter of 2005 compared with income of $178 million for the third quarter of 2004. See the following page for a table of items affecting the comparability of earnings between periods. The after-tax results by major operating activity in 2005 and 2004 were as follows: Three months ended Nine months ended September 30 September 30 (unaudited) (unaudited) ------------------ ------------------ 2005 2004 2005 2004 -------- -------- -------- -------- (In millions, except per share amounts) Exploration and production $ 235 $ 155 $ 760 $ 544 Refining and marketing 125 85 286 358 Corporate (54) (23) (151) (49) Interest expense (34) (39) (105) (112) -------- -------- -------- -------- Net income from continuing operations $ 272 $ 178 $ 790 $ 741 Discontinued operations - - - 7 -------- -------- -------- -------- Net income $ 272 $ 178 $ 790 $ 748 ======== ======== ======== ======== Net income per share (diluted) $ 2.60 $ 1.74 $ 7.61 $ 7.34 ======== ======== ======== ======== Weighted average number of shares (diluted) 104.4 102.4 103.8 101.8 ======== ======== ======== ======== Exploration and production earnings were $235 million in the third quarter of 2005 compared with $155 million in the third quarter of 2004. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 312,000 barrels per day in the third quarter of 2005 compared with 323,000 barrels per day in the third quarter of 2004. Hurricane activity in the Gulf of Mexico reduced third quarter 2005 production by approximately 9,000 barrels of oil equivalent per day. This decrease is estimated to have reduced third quarter exploration and production earnings by approximately $25 million. The Corporation also incurred incremental third quarter expenses related to the hurricanes of $14 million, after income taxes. In the third quarter of 2005, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $35.74 per barrel, an increase of $9.01 per barrel from the third quarter of 2004. The Corporation's average United States natural gas selling price was $8.53 per Mcf in the third quarter of 2005, an increase of $4.13 per Mcf from the third quarter of 2004. Refining and marketing earnings were $125 million in the third quarter of 2005 compared with $85 million in the third quarter of 2004. The increase in refining and marketing earnings was due to higher refining earnings, reflecting improved margins, partially offset by lower marketing results. The following items, on an after-tax basis, are included in net income in the third quarter and first nine months of 2005 and 2004 (in millions): Three months ended Nine months ended September 30 September 30 ------------------ ----------------- 2005 2004 2005 2004 --------- -------- -------- -------- Exploration and production -------------------------- Hurricane related costs $ (14) $ - $ (14) $ - Income tax adjustments - - 11 - Gains from asset sales - - 11 34 Legal settlement - - 11 - Corporate --------- Premiums on bond repurchases - - (7) - Income tax adjustments (31) - (72) 13 --------- -------- -------- -------- $ (45) $ - $ (60) $ 47 ========= ======== ======== ======== The corporate tax charges in the third quarter and first nine months of 2005 represent income tax provisions related to the repatriation of foreign earnings under the American Jobs Creation Act of 2004. Capital and exploratory expenditures in the third quarter of 2005 amounted to $699 million compared with $381 million in the third quarter of 2004. Of these amounts, $674 million and $363 million in the third quarter of 2005 and 2004, respectively, related to exploration and production activities. AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS) Third Third Second Quarter Quarter Quarter 2005 2004 2005 -------- -------- -------- Income Statement ---------------- Revenues and Non-operating Income Sales and other operating revenues $ 5,769 $ 3,830 $ 4,963 Non-operating income Equity in income of HOVENSA L.L.C. 151 75 108 Other 36 25 11 -------- -------- -------- Total revenues and non- operating income 5,956 3,930 5,082 -------- -------- -------- Costs and Expenses Cost of products sold 4,424 2,742 3,621 Production expenses 256 202 242 Marketing expenses 202 186 205 Exploration expenses, including dry holes and lease impairment 91 64 87 Other operating expenses 31 52 38 General and administrative expenses 83 81 86 Interest expense 54 62 54 Depreciation, depletion and amortization 251 230 261 -------- -------- -------- Total costs and expenses 5,392 3,619 4,594 -------- -------- -------- Income before income taxes 564 311 488 Provision for income taxes 292 133 189 -------- -------- -------- Net income $ 272 $ 178 $ 299 ======== ======== ======== Preferred stock dividends 12 12 12 -------- -------- -------- Net income applicable to common stockholders $ 260 $ 166 $ 287 ======== ======== ======== Supplemental Income Statement Information ----------------------------------------- Foreign currency gains, after-tax $ 2 $ 4 $ 8 Capitalized interest 22 12 22 Cash Flow Information --------------------- Net cash provided by operating activities (*) $ 484 $ 817 $ 606 Capital and Exploratory Expenditures ------------------------------------ Exploration and Production United States $ 74 $ 100 $ 93 International 600 263 414 -------- -------- -------- Total Exploration and Production 674 363 507 Refining and Marketing 25 18 20 -------- -------- -------- Total Capital and Exploratory Expenditures $ 699 $ 381 $ 527 ======== ======== ======== Exploration expenses charged to income included above United States $ 30 $ 31 $ 23 International 12 (6) 11 -------- -------- -------- $ 42 $ 25 $ 34 ======== ======== ======== (*) Includes changes in working capital AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS) Nine Months ----------------- 2005 2004 -------- -------- Income Statement ---------------- Revenues and Non-operating Income Sales and other operating revenues $15,688 $12,120 Non-operating income Equity in income of HOVENSA L.L.C. 309 223 Gain on asset sales 18 23 Other 93 63 -------- -------- Total revenues and non- operating income 16,108 12,429 -------- -------- Costs and Expenses Cost of products sold 11,674 8,650 Production expenses 722 586 Marketing expenses 604 537 Exploration expenses, including dry holes and lease impairment 310 204 Other operating expenses 100 147 General and administrative expenses 254 253 Interest expense 169 179 Depreciation, depletion and amortization 767 695 -------- -------- Total costs and expenses 14,600 11,251 -------- -------- Income from continuing operations before income taxes 1,508 1,178 Provision for income taxes 718 437 -------- -------- Income from continuing operations 790 741 Discontinued operations -- 7 -------- -------- Net income $ 790 $ 748 ======== ======== Preferred stock dividends 36 36 -------- -------- Net income applicable to common stockholders $ 754 $ 712 ======== ======== Supplemental Income Statement Information ----------------------------------------- Foreign currency gains, after-tax $ 16 $ 7 Capitalized interest 57 41 Cash Flow Information --------------------- Net cash provided by operating activities (*) $ 1,551 $ 1,649 Capital and Exploratory Expenditures ------------------------------------ Exploration and Production United States $ 258 $ 323 International 1,377 805 -------- -------- Total Exploration and Production 1,635 1,128 Refining and Marketing 73 45 -------- -------- Total Capital and Exploratory Expenditures $ 1,708 $ 1,173 ======== ======== Exploration expenses charged to income included above United States $ 61 $ 58 International 31 23 -------- -------- $ 92 $ 81 ======== ======== (*) Includes changes in working capital AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS) September December 30 31 2005 2004 ---------- ---------- Balance Sheet Information ------------------------- Cash and short-term investments $ 760 $ 877 Other current assets 4,703 3,458 Investments 1,303 1,254 Property, plant and equipment - net 9,143 8,505 Other assets 2,946 2,218 ---------- ---------- Total assets $ 18,855 $ 16,312 ========== ========== Current portion of long-term debt $ 78 $ 50 Other current liabilities 7,092 4,647 Long-term debt 3,709 3,785 Deferred liabilities and credits 2,452 2,233 Stockholders' equity excluding other comprehensive income (loss) 7,385 6,621 Accumulated other comprehensive income (loss) (1,861) (1,024) ---------- ---------- Total liabilities and stockholders' equity $ 18,855 $ 16,312 ========== ========== AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS) Third Quarter 2005 ------------------------------- United States International Total -------- -------------- ------- Sales and other operating revenues $275 $767 $1,042 Non-operating income (expenses) -- 16 16 -------- -------------- ------- Total revenues 275 783 1,058 -------- -------------- ------- Costs and expenses Production expenses, including related taxes 76 180 256 Exploration expenses, including dry holes and lease impairment 40 51 91 General, administrative and other expenses 13 19 32 Depreciation, depletion and amortization 36 200 236 -------- -------------- ------- Total costs and expenses 165 450 615 -------- -------------- ------- Results of operations before income taxes 110 333 443 Provision for income taxes 41 167 208 -------- -------------- ------- Results of operations $69 $166 $235 ======== ============== ======= Third Quarter 2004 ------------------------------- United States International Total -------- -------------- ------- Sales and other operating revenues $220 $567 $787 Non-operating income (expenses) 3 8 11 -------- -------------- ------- Total revenues 223 575 798 -------- -------------- ------- Costs and expenses Production expenses, including related taxes 55 147 202 Exploration expenses, including dry holes and lease impairment 38 26 64 General, administrative and other expenses 13 17 30 Depreciation, depletion and amortization 31 186 217 -------- -------------- ------- Total costs and expenses 137 376 513 -------- -------------- ------- Results of operations before income taxes 86 199 285 Provision for income taxes 33 97 130 -------- -------------- ------- Results of operations $53 $102 $155 ======== ============== ======= Second Quarter 2005 ------------------------------- United States International Total -------- -------------- ------- Sales and other operating revenues $269 $769 $1,038 Non-operating income (expenses) (3) 2 (1) -------- -------------- ------- Total revenues 266 771 1,037 -------- -------------- ------- Costs and expenses Production expenses, including related taxes 58 184 242 Exploration expenses, including dry holes and lease impairment 51 36 87 General, administrative and other expenses 18 17 35 Depreciation, depletion and amortization 42 205 247 -------- -------------- ------- Total costs and expenses 169 442 611 -------- -------------- ------- Results of operations before income taxes 97 329 426 Provision for income taxes 34 129 163 -------- -------------- ------- Results of operations $63 $200 $263 ======== ============== ======= AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED) (IN MILLIONS) Nine Months 2005 ------------------------------ United States International Total ------- -------------- ------- Sales and other operating revenues $823 $2,287 $3,110 Non-operating income (expenses) (4) 67 63 ------- -------------- ------- Total revenues 819 2,354 3,173 ------- -------------- ------- Costs and expenses Production expenses, including related taxes 183 539 722 Exploration expenses, including dry holes and lease impairment 200 110 310 General, administrative and other expenses 51 49 100 Depreciation, depletion and amortization 122 602 724 ------- -------------- ------- Total costs and expenses 556 1,300 1,856 ------- -------------- ------- Results of operations before income taxes 263 1,054 1,317 Provision for income taxes 98 459 557 ------- -------------- ------- Results of operations $165 $595 $760 ======= ============== ======= Nine Months 2004 ------------------------------ United States International Total ------- -------------- ------- Sales and other operating revenues $631 $1,856 $2,487 Non-operating income (expenses) (2) 44 42 ------- -------------- ------- Total revenues 629 1,900 2,529 ------- -------------- ------- Costs and expenses Production expenses, including related taxes 144 442 586 Exploration expenses, including dry holes and lease impairment 101 103 204 General, administrative and other expenses 48 65 113 Depreciation, depletion and amortization 95 561 656 ------- -------------- ------- Total costs and expenses 388 1,171 1,559 ------- -------------- ------- Results of operations before income taxes 241 729 970 Provision for income taxes 90 336 426 ------- -------------- ------- Results of operations $151 $393 $544 ======= ============== ======= AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES) Third Third Second Quarter Quarter Quarter 2005 2004 2005 ------- ------- ------- Operating Data -------------- Net Production Per Day ---------------------- Crude oil - barrels United States 42 44 47 Europe 102 109 117 Africa, Asia and other 74 66 75 ------- ------- ------- Total 218 219 239 ======= ======= ======= Natural gas liquids - barrels United States 11 12 14 Europe 2 6 5 ------- ------- ------- Total 13 18 19 ======= ======= ======= Natural gas - mcf United States 125 164 148 Europe 218 270 289 Africa, Asia and other 141 82 138 ------- ------- ------- Total 484 516 575 ======= ======= ======= Barrels of oil equivalent 312 323 355 ======= ======= ======= Average Selling Price (including hedging) ----------------------------------------- Crude oil - per barrel United States $34.86 $28.26 $32.44 Europe 34.59 26.07 33.22 Africa, Asia and other 37.75 26.69 31.10 Natural gas liquids - per barrel United States $40.90 $31.73 $34.98 Europe 36.77 24.17 35.49 Natural gas - per mcf United States $8.53 $4.40 $6.47 Europe 4.12 3.58 4.60 Africa, Asia and other 4.12 3.86 3.95 Average Selling Price (excluding hedging) ----------------------------------------- Crude oil - per barrel United States $58.32 $40.53 $47.83 Europe 59.47 42.09 50.10 Africa, Asia and other 59.56 39.50 47.78 Natural gas liquids - per barrel United States $40.90 $31.73 $34.98 Europe 36.77 24.17 35.49 Natural gas - per mcf United States $8.53 $5.13 $6.47 Europe 4.12 3.58 4.60 Africa, Asia and other 4.12 3.86 3.95 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES) Nine Months --------------- 2005 2004 ------- ------- Operating Data -------------- Net Production Per Day ---------------------- Crude oil - barrels United States 46 41 Europe 113 122 Africa, Asia and other 73 64 ------- ------- Total 232 227 ======= ======= Natural gas liquids - barrels United States 12 12 Europe 5 6 ------- ------- Total 17 18 ======= ======= Natural gas - mcf United States 146 169 Europe 281 321 Africa, Asia and other 127 85 ------- ------- Total 554 575 ======= ======= Barrels of oil equivalent 341 340 ======= ======= Average Selling Price (including hedging) ----------------------------------------- Crude oil - per barrel United States $33.10 $26.41 Europe 33.00 26.24 Africa, Asia and other 33.35 26.91 Natural gas liquids - per barrel United States $35.98 $28.03 Europe 34.40 24.08 Natural gas - per mcf United States $6.94 $4.95 Europe 4.79 3.80 Africa, Asia and other 4.01 3.81 Average Selling Price (excluding hedging) ----------------------------------------- Crude oil - per barrel United States $50.16 $36.68 Europe 51.93 36.01 Africa, Asia and other 50.87 35.56 Natural gas liquids - per barrel United States $35.98 $28.03 Europe 34.40 24.08 Natural gas - per mcf United States $6.94 $5.35 Europe 4.79 3.80 Africa, Asia and other 4.01 3.81 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES HEDGED PRICES AND VOLUMES WTI Brent ---------------------------- ---------------------------- Average Thousands of Average Thousands of Selling barrels per Selling barrels per Maturity Price day Price day ------------ --------------- ---------------------------- ------------ 2005 4th Quarter $32.16 28 $30.37 118 2006 - - 28.10 30 2007 - - 25.85 24 2008 - - 25.56 24 2009 - - 25.54 24 2010 - - 25.78 24 2011 - - 26.37 24 2012 - - 26.90 24 Note: In addition to the income statement effects of the open hedge positions indicated above, the Corporation has after-tax deferred realized losses of $45 million as of September 30 included in accumulated other comprehensive income (loss). These after-tax losses will reduce income in the fourth quarter. There were no natural gas hedges outstanding at September 30. AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA Third Third Second Quarter Quarter Quarter 2005 2004 2005 -------- -------- -------- Financial Information (in millions) ----------------------------------- Refining and Marketing Earnings ------------------------------- Income before income taxes $ 202 $ 118 $ 151 Provision for income taxes 77 33 53 -------- -------- -------- Refining and Marketing Earnings $ 125 $ 85 $ 98 ======== ======== ======== Summary of Refining and Marketing Earnings --------------------------------- Refining $ 144 $ 68 $ 77 Marketing (22) 6 14 Trading 3 11 7 -------- -------- -------- Total Refining and Marketing Earnings $ 125 $ 85 $ 98 ======== ======== ======== ---------------------------------------------------------------------- Operating Data (in thousands unless noted) ------------------------------------------ Refined Product Sales (barrels per day) --------------------------------------- Gasoline 226 198 227 Distillates 104 116 104 Residuals 43 44 59 Other 37 36 45 -------- -------- -------- Total 410 394 435 ======== ======== ======== Refinery Throughput (barrels per day) ------------------------------------- HOVENSA - Crude runs 413 480 500 HOVENSA - AHC 50% share 206 240 250 Port Reading 62 40 58 ----------------- Refinery Utilization Refinery Capacity -------------------- ----------------- (thousands of HOVENSA barrels per day) Crude 500 82.5%* 95.9% 100.1% FCC 150 89.7% 93.9% 93.3% Coker 58 92.4% 94.1% 100.9% Port Reading 65 95.5% 64.2%** 89.2% ----------------- * Reflects reduced utilization from scheduled maintenance. ** Represents a storm-related interruption. Retail Marketing ---------------- Number of retail stations (a) 1,358 1,238 1,352 Convenience store revenue (in millions) (b) $ 260 $ 249 $ 254 Average gasoline volume per station (gallons per month) (b) 211 192 213 (a) Includes company operated, branded/dealer and Wilco-Hess. (b) Company operated only. AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA Nine Months ----------------------- 2005 2004 ----------- ----------- Financial Information (in millions) ----------------------------------- Refining and Marketing Earnings ------------------------------- Income before income taxes $ 455 $ 470 Provision for income taxes 169 112 ----------- ----------- Refining and Marketing Earnings $ 286 $ 358 =========== =========== Summary of Refining and Marketing Earnings ------------------------------------------ Refining $ 263 $ 265 Marketing 5 49 Trading 18 44 ----------- ----------- Total Refining and Marketing Earnings $ 286 $ 358 =========== =========== ---------------------------------------------------------------------- Operating Data (in thousands unless noted) ------------------------------------------ Refined Product Sales (barrels per day) --------------------------------------- Gasoline 211 197 Distillates 125 136 Residuals 59 59 Other 40 35 ----------- ----------- Total 435 427 =========== =========== Refinery Throughput (barrels per day) ------------------------------------- HOVENSA - Crude runs 454 488 HOVENSA - AHC 50% share 227 244 Port Reading 52 51 ----------------- Refinery Utilization Refinery Capacity -------------------- ----------------- (thousands of HOVENSA barrels per day) Crude 500 90.8%* 97.5% FCC 150 80.2%* 95.2% Coker 58 95.4% 98.0% Port Reading 65 80.4%* 81.5%** ----------------- * Reflects reduced utilization from scheduled maintenance. ** Represents a storm-related interruption. Retail Marketing ---------------- Number of retail stations (a) 1,358 1,238 Convenience store revenue (in millions) (b) $ 732 $ 704 Average gasoline volume per station (gallons per month) (b) 206 191 (a) Includes company operated, branded/dealer and Wilco-Hess. (b) Company operated only. CONTACT: Amerada Hess Corporation J.R. Wilson, 212-536-8940