Hess Corporation, Company Intelligence Report

Hess Corporation, Company Intelligence Report

Summary

Hess Corporation (Hess) is an integrated energy company globally engaged in Exploration and Production (E&P) and Marketing and Refining (M&R) businesses. The company primarily focuses on the development of its E&P business to drive its growth and support its overall oil and gas portfolio. However, in the last couple of years, Hess has disposed a large portion of its mature E&P assets in the Gulf of Mexico (GOM) and North Sea regions in order to support its exploration programs in Australia, Brazil, Ghana, Libya and Egypt. Apart from its exploration assets, the company has been strengthening its assets of the Joint Development Area project in Thailand-Malaysia, the Okume Complex and Ceiba fields in Equatorial Guinea, the Ujung Pangkah field in Indonesia, the Shenzi field in deepwater GOM and the North Dakota Bakken shale which are all in the development or production stage. It has been anticipating additional production from its Shenzi field, the phase two development of Ujung Pangkah and its Bakken shale assets in the coming years.

The company has been supplementing its E&P business through its refining facility in Port Reading in New Jersey. With diversified oil and gas portfolio the company has been maximizing its financial returns and strengthening its long-term growth.

Scope

- Key Highlights: This section provides detailed analysis on the company’s overall oil and gas value chain, new projects, growth opportunities, new ventures, assets performance, hedging strategies, Capex funding, geographical results of oil and gas operations.
- Goals and Strategies: This section provides the upcoming goals and strategies of the company. The section mainly goals and strategies followed by the company in order to meet its upcoming goals.
- SWOT: The report’s SWOT section provides the internal strength, weakness, opportunities and threats of company to reflect its strategic positions in the market.
- Production and Development Overview: This section highlights the company’s crude oil and natural gas production forecast from its legacy and upcoming assets by region and commodity mix for next five years. The report also covers the detailed information and analysis on the company’s producing and development assets.
- Exploration: This section includes detailed explanation and analysis on the company’s exploration assets resulted due to new discoveries, new drilling and other activities.
- M&A trends: This section mainly provides information and analysis on the company’s recent assets transactions, joint ventures, acquisition, and divestment activities during the last one year. This section highlights the company’s status as a buyer or seller during the analyzed period.
- Financial Forecast and Valuation: This section highlights the detailed financial statement forecast for next five years. With the financial statement forecast, this section also provides intrinsic value of the company by using Net Asset Valuation method.
- Peer Group Analysis: This section compares the company’s performance with its peer group on the basis of share prices, financial ratios, operational and financial parameters and other related parameters.
- Financial and Operational Metrics: This section covers the company’s historical performance on several financial and operational parameters such as Production and Reserves, Reserves Replacement, Costs Incurred, Acreage, Wells, F&D Costs, Oil and Gas Revenue and Expenses etc.

Reasons to buy

The report will enhance the decision-making capability in a more rapid and time sensitive manner. It will allow you to -
- Provide detailed analysis to those who are interested in knowing the companies’ existing and future business strategies.
- Provide in-depth analysis on the companies E&P profiles along with the exploration and M&A updates.
- Provide valuable insights to those who are tracking oil and gas markets and wants to know the intrinsic value of the companies.
- Use the analysis for strategy and planning, M&A identifications, and competitor analysis.

Keywords

Valuation Report, NAV, Oil and gas valuation, Strategic Evaluation, Strategic and Operational Analysis, Forecasted financial Statements, SWOT, Capital expenditure, Market Scenario, Revenue, Financial Ratios, Production, Reserves, Peer Group Comparison, DCF, Outlook, Investment Thesis, Investment Summary, Hess SHOW LESS READ MORE >

1 Table of contents
1 Table of contents
1.1 List of Tables
1.2 List of Figures
2 Hess Corporation, Company Overview
3 Hess Corporation, Investment Summary
3.1 Hess Has Been Exploring Unconventional Oil and Natural Gas Resources to Map Long Term Growth
3.2 Offsetting the Decline in Production through Development of Core Conventional Assets
3.2.1 Norway - Valhall and Hod Field
3.2.2 Australia - WA-390P
3.2.3 Malaysia/Thailand Joint Development Area
3.2.4 Equatorial Guinea Block G
3.2.5 US - Gulf of Mexico
3.2.6 Ghana - Tano Cape Three Points
3.2.7 Indonesia - Ujung Pangkah project and Natuna A Field
3.2.8 Brunei - Block CA-1
3.2.9 Kurdistan - Dinarta and Shakrok.
3.3 Managing Liquidity through all available sources of fund: Still Liquidity is an issue going forward
4 Hess Corporation, SWOT Analysis
4.1 Strength
4.1.1 Consistent Growth in its Reserve Base Achieved through Organic Reserve Additions
4.1.2 Technical Expertise to Support Development Activities
4.1.3 Globally Diversified Oil and Gas Portfolio
4.2 Weaknesses
4.2.1 Continuous Decline in Production from Major Geography of Operations
4.3 Opportunities
4.3.1 Focusing on Unconventional Sources
4.3.2 Excellent Potentials of Unconventional Resources
4.4 Threats
4.4.1 Inconsistent Operational Performance Can Adversely Impact Its Growth
5 Hess Corporation, Goals and Strategies
5.1 Sustainable Long-term Growth Primarily through Unconventional Resources Development
5.2 Hess Plans to Strengthen its Brand on East Coast and Generate Cash Flows Through Selective Growth
5.3 Develop Other Conventional Assets through JVs and Aggressive Exploration and Development Programs
6 Hess Corporation, Production Overview
6.1 Production Profile
6.2 The US
6.3 Europe
6.4 Africa
6.5 Asia Pacific and Others
7 Hess Corporation, Exploration and Development Overview
7.1 The US
7.2 Europe
7.3 Asia
7.4 Africa
8 Hess Corporation, Capital Expenditure
8.1 Costs Incurred
9 Hess Corporation, Acreage
10 Hess Corporation, M&A Highlights
11 Hess Corporation, Downstream Updates
12 Hess Corporation, Forecast Production and Financial Statements
12.1 Income Statement (2009-2016)
12.2 Balance Sheet (2009-2016)
12.3 Cash Flow Statement (2006-2016)
12.4 Financial Ratios
13 Hess Corporation, Valuation
13.1 Net Asset Value
14 Hess Corporation, Peer Comparision
14.1 Share Price Performance
14.2 Operational and Financial Performance
14.3 Key Financial and Operational Ratio
15 Hess Corporation, Production and Reserves Trends
15.1 Total Oil and Gas, Reserves and Production
15.1.1 Total Crude Oil and Natural Gas Production and Reserves Trend, 2007-2011
15.1.2 Total Crude Oil & Natural Gas Production and Reserves By Country/Region, 2007-2011
15.1.3 Total Crude Oil and Natural Gas Reserve Changes, 2007-2011
15.2 Hess Corporation, Crude Oil/Liquids Production and Reserve
15.2.1 Crude Oil/Liquids Production and Reserve Trend, 2007-2011
15.2.2 Crude Oil Production and Reserves By Country/Region, 2007-2011
15.2.3 Crude Oil/Liquids Reserve Changes, 2007-2011
15.3 Hess Corporation, Natural Gas Production and Reserve
15.3.1 Natural Gas Production and Reserve Trend, 2007-2011
15.3.2 Natural Gas Production and Reserves, By Country/Region, 2007-2011
15.3.3 Natural Gas Reserve Changes, 2007-2011
15.4 Hess Corporation., Total Crude Oil and Natural Gas Reserves Life Index
15.4.1 Total Crude Oil and Natural Gas Reserves Life Index, 2007-2011
15.4.2 Total Crude Oil and Natural Gas Reserves Life Index, By Country/Region, 2007-2011
15.5 Hess Corporation, E&P Costs Trends
15.5.1 Upstream Capital Expenditure, 2007-2011
15.5.2 Acquisition Costs By Country/Region, 2007-2011
15.5.3 Exploration and Development Costs, By Country/Region, 2007-2011
15.6 Hess Corporation.,Oil and Gas Cost Per boe, $/boe
15.6.1 Oil and Gas Cost Per boe, $/boe, 2007-2011
15.6.2 Oil and Gas Cost Per boe, $/boe, By Country/Region, 2007-2011
15.7 Hess Corporation, Reserve Replacement Ratio
15.7.1 Oil and Gas Production Replacement Ratio, 2007-2011
15.7.2 Oil and Gas Production Replacement Ratio, By Country/Region, 2007-2011
15.8 Hess Corporation, Results of Oil & Gas Operations Trend
15.8.1 Oil and Gas Revenue and Expenses, 2007-2011
15.8.2 Oil and Gas Revenue and Expenses, By Country/Region, 2007-2011
15.9 Hess Corporation, Oil and Gas Revenue and Expenses, Per boe
15.9.1 Oil and Gas Revenue and Expenses, By boe, 2007-2011
15.9.2 Oil and Gas Revenue and Expenses Per boe, By Country/Region, 2007-2011
16 Appendix
16.1 Abbreviations
16.2 Methodology
16.2.1 Coverage
16.2.2 Secondary Research
16.2.3 Primary Research
16.3 Contact Us
16.4 Disclaimer

1.1 List of Tables
Table 1: Hess Corporation, Key Events April 2011-April 2012
Table 2: Hess Corporation, Total Oil & Gas Production (MMboe), 2008-2011
Table 3: Hess Corporation, Capital Expenditure Classification, $m, 2008-2011
Table 4: Hess Corporation, Costs Incurred ($m), 2008-2011
Table 5: Hess Corporation, Reserve Replacement Ratio and Finding and Development Cost, 2008-2011
Table 6: Hess Corporation, Recent Transactions as a Seller, 2009-2011
Table 7: Hess Corporation, Recent Transactions as a Buyer, 2009-2011
Table 8: Hess Corporation, Actual and Forecasted Production, 2008-2016
Table 9: GlobalData, Price Forecast, 2012-2016
Table 10: Hess Corporation, Income Statement ($m except EPS figures), 2009-2016
Table 11: Hess Corporation, Balance Sheet ($m), 2009-2016
Table 12: Hess Corporation, Cash Flow Statement ($m), 2009-2016
Table 13: Hess Corporation, Other Financial Ratios, 2009-2016
Table 14: Hess Corporation, Net Asset Value, 2012
Table 15: Hess Corporation, Sensitivity Analysis on Fair Value ($/share), 2012
Table 16: Hess Corporation, NPV per Unit Crude Oil & NGL Production, 2012
Table 17: Hess Corporation, NPV per Unit Natural Gas Production, 2012
Table 18: Hess Corporation, NPV per Unit Total Production, 2012
Table 19: Hess Corporation, Peer Group Comparison, Operational and Financial Performance, 2011
Table 20: Hess Corporation, Total Crude Oil and Natural Gas, Production and Reserves, MMboe, 2007-2011
Table 21: Hess Corporation, Total Crude Oil & Natural Gas Production and Reserves, By Country/Region, MMboe, 2007-2011
Table 22: Hess Corporation, Total Crude Oil and Natural Gas Reserve Changes, MMboe, 2007-2011
Table 23: Hess Corporation, Crude Oil Production and Reserves Metrics, MMbbl, 2007-2011
Table 24: Hess Corporation, Crude Oil Production and Reserves, By Country/Region, MMbbl, 2007-2011
Table 25: Hess Corporation, Crude Oil Reserve Changes, MMbbl, 2007-2011
Table 26: Hess Corporation, Natural Gas Production and Reserves Metrics, Bcf, 2007-2011
Table 27: Hess Corporation, Natural Gas Production and Reserves, By Country/Region, Bcf, 2007-2011
Table 28: Hess Corporation, Natural Gas Reserve Changes, Bcf, 2007-2011
Table 29: Hess Corporation, Oil and Gas Reserves Life Index, Years, 2007-2011
Table 30: Hess Corporation, Oil and Gas Reserves Life Index, By Country/Region, Years, 2007-2011
Table 31: Hess Corporation, Upstream Capital Expenditure, $m, 2007-2011
Table 32: Hess Corporation, Proved and Unproved Acquisition Costs, By Country/Region, $m, 2007-2011
Table 33: Hess Corporation, Exploration and Development Costs, By Country/Region, $m, 2007-2011
Table 34: Hess Corporation, Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, $/boe, 2007-2011
Table 35: Hess Corporation, Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, $/boe, By Country/Region, 2007-2011
Table 36: Hess Corporation, Oil and Gas Production Replacement Ratio, %, 2007-2011
Table 37: Hess Corporation, 3-Year Wt.Avg. Oil and Gas Production Replacement Ratio, By Country/Region, %, 2007-2011
Table 38: Hess Corporation, Revenue and Expenses, $m, 2007-2011
Table 39: Hess Corporation, Revenue and Expenses, By Country/Region, $m, 2007-2011
Table 40: Hess Corporation, Oil and Gas Revenue and Expenses, $/boe, 2007-2011
Table 41: Hess Corporation, Oil and Gas Revenue and Expenses, $/boe, By Country/Region, 2007-2011

1.2 List of Figures
Figure 1: Hess Corporation, Global Operations, 2012
Figure 2: Hess Corporation, Performance Charts, 2008-2011
Figure 3: Hess Corporation, Share Price Performance, May 2011- April 2012
Figure 4: Hess Corporation, Capex Plan, 2012
Figure 5: Hess Corporation and Peer Group Net Acreages Position in Bakken Shale Area, 2012
Figure 6: Hess Corporation and Peer Group Net Acreages Position in Eagle Ford Shale Area, 2012
Figure 7: Hess Corporation and Peer Group Comparison, Net Acreages, Marcellus Shale, 2012
Figure 8: Hess Corporation, Australian Exploration Activities, Field Map, 2012
Figure 9: Hess Corporation, Malaysia-Thailand, JDA, Overview, 2012
Figure 10: Hess Corporation, Comparison of Capex and Cash Flow from Operations, $m, 2008-2011
Figure 11: Hess Corporation, Inflow, Outflow and Net Cash Position, $m, 2008-2011
Figure 12: Hess Corporation, Organic Reserve Additions, Inorganic Reserve Additions, Total Proved Reserves and Organic Reserve Additions as % of Total Reserve Additions, 2007-2011
Figure 13: Hess Corporation, Total Production From Upstream Assets, MMboe, 2009-2016
Figure 14: Hess Corporation, Global Producing Assets Map, 2012
Figure 15: Hess Corporation, Total Oil and Gas Production By Country, MMboe, 2007-2011
Figure 16: Hess Corporation, Estimated Production By Countries, 2012-2016
Figure 17: Hess Corporation, Capital Expenditure Classification, $m, 2008-2011
Figure 18: Hess Corporation, Costs Incurred ($m), 2008-2011
Figure 19: Hess Corporation, Reserve Replacement Ratio and Finding and Development Cost, 2008-2011
Figure 20: Hess Corporation, Peer Group Comparison, Acreage (Million Acres), 2011
Figure 21: Hess Corporation , Net Developed and Undeveloped Acreage, 2008-2011
Figure 22: Hess Corporation, Refining Capacity By Segment (%), 2011
Figure 23: Hess Corporation and Peer Group, Relative Share Price Performance Index, May 2011-April 2012
Figure 24: Hess Corporation, Peer Group Comparison, Operational and Financial Parameters, 2011
Figure 25: Hess Corporation, Peer Group Comparison, Total Reserves & Production, MMboe, 2011
Figure 26: Hess Corporation, Peer Group Comparison, Reserve Life Index, Years, 2011
Figure 27: Hess Corporation, Peer Group Comparison, Valuation Ratios, 2011
Figure 28: Hess Corporation, Total Crude Oil and Natural Gas, Production and Reserves, MMboe, 2007-2011
Figure 29: Hess Corporation, Total Oil & Gas Reserves, End of Period, By Country/Region, MMboe, 2007-2011
Figure 30: Hess Corporation, Total Oil & Gas Production, By Country/Region, MMboe, 2007-2011
Figure 31: Hess Corporation, Total Crude Oil and Natural Gas Reserve Changes, MMboe, 2011
Figure 32: Hess Corporation, Crude Oil Production and Reserves Metrics, MMbbl, 2007-2011
Figure 33: Hess Corporation, Oil Reserves, End of Period, By Country/Region, MMbbl, 2007-2011
Figure 34: Hess Corporation, Oil Production, By Country/Region, MMbbl, 2007-2011
Figure 35: Hess Corporation, Crude Oil Reserve Changes, MMbbl, 2011
Figure 36: Hess Corporation, Natural Gas Production and Reserves Metrics, Bcf, 2007-2011
Figure 37: Hess Corporation, Gas Reserves, End of Period, By Country/Region, Bcf, 2007-2011
Figure 38: Hess Corporation, Gas Production, By Country/Region, Bcf, 2007-2011
Figure 39: Hess Corporation, Natural Gas Reserve Changes, Bcf, 2011
Figure 40: Hess Corporation, Oil and Gas Reserves Life Index, Years, 2007-2011
Figure 41: Hess Corporation, Gas Reserve Life Index, By Country/Region, Ratio, 2007-2011
Figure 42: Hess Corporation, Oil & Gas Reserve Life Index, By Country/Region, Ratio, 2007-2011
Figure 43: Hess Corporation, Oil Reserve Life Index, By Country/Region, Ratio, 2007-2011
Figure 44: Hess Corporation, Upstream Capital Expenditure, $m, 2007-2011
Figure 45: Hess Corporation, Proved Acquisition Costs, By Country/Region, $m, 2007-2011
Figure 46: Hess Corporation, Unproved Acquisition Costs, By Country/Region, $m, 2007-2011
Figure 47: Hess Corporation, Development Costs, By Country/Region, $m, 2007-2011
Figure 48: Hess Corporation, Exploration Costs, By Country/Region, $m, 2007-2011
Figure 49: Hess Corporation, 3-Year Wt.Avg., Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, $/boe, 2007-2011
Figure 50: Hess Corporation, Oil & Gas Finding & Development Cost/boe, 3-Year Average, By Country/Region, $/boe, 2007-2011
Figure 51: Hess Corporation, Oil & Gas Finding Cost per boe, 3-Year Average, By Country/Region, $/boe, 2007-2011
Figure 52: Hess Corporation, Reserve Replacement Cost per boe, 3-Year Average, By Country/Region, $/boe, 2007-2011
Figure 53: Hess Corporation, Proved Reserves Acquisition Cost per boe, 3-Year Average, By Country/Region, $/boe, 2007-2011
Figure 54: Hess Corporation, 3-Year Wt.Avg., Oil and Gas Production Replacement Ratio, %, 2007-2011
Figure 55: Hess Corporation, 3-Year Wt. Avg. Gas F&D Production Replacement, By Country/Region, %, 2007-2011
Figure 56: Hess Corporation, 3-Year Wt. Avg. Gas RRC Production Replacement, By Country/Region, %, 2007-2011
Figure 57: Hess Corporation, 3-Year Wt. Avg. Oil & Gas F&D Production Replacement, By Country/Region, %, 2007-2011
Figure 58: Hess Corporation, 3-Year Wt. Avg. Oil & Gas RRC Production Replacement, By Country/Region, %, 2007-2011
Figure 59: Hess Corporation, 3-Year Wt. Avg. Oil F&D Production Replacement, By Country/Region, %, 2007-2011
Figure 60: Hess Corporation, 3-Year Wt. Avg. Oil RRC Production Replacement, By Country/Region, %, 2007-2011
Figure 61: Hess Corporation, Revenue and Expenses, $m, 2007-2011
Figure 62: Hess Corporation, Depreciation, Depletion and Amortization From Upstream Oil & Gas Operations, By Country/Region, $m, 2007-2011
Figure 63: Hess Corporation, Exploration Expenses, By Country/Region, $m, 2007-2011
Figure 64: Hess Corporation, Income Tax Provision (Benefit) From Upstream Oil & Gas Operations, By Country/Region, $m, 2007-2011
Figure 65: Hess Corporation, Net Income/ Loss From Upstream Oil & Gas Operations, By Country/Region, $m, 2007-2011
Figure 66: Hess Corporation, Oil & Gas Revenue, By Country/Region, $m, 2007-2011
Figure 67: Hess Corporation, Profit (loss) Before Taxation From Upstream Oil & Gas Operations, By Country/Region, $m, 2007-2011
Figure 68: Hess Corporation, Production Costs, By Country/Region, $m, 2007-2011
Figure 69: Hess Corporation, Total Expenses From Upstream Oil & Gas Operations, By Country/Region, $m, 2007-2011
Figure 70: Hess Corporation, Oil and Gas Revenue and Expenses, $/boe, 2007-2011
Figure 71: Hess Corporation, Exploration Expenses per boe, By Country/Region, $/boe, 2007-2011
Figure 72: Hess Corporation, Income Tax/(Benefit) per boe, By Country/Region, $/boe, 2007-2011
Figure 73: Hess Corporation, Lifting Cost per boe, By Country/Region, $/boe, 2007-2011
Figure 74: Hess Corporation, Annual Net Income per boe, By Country/Region, $/boe, 2007-2011
Figure 75: Hess Corporation, Oil & Gas Revenue per boe, By Country/Region, $/boe, 2007-2011
Figure 76: Hess Corporation, Total DD&A per boe, By Country/Region, $/boe, 2007-2011
Figure 77: Hess Corporation, Total Revenue per boe, By Country/Region, $/boe, 2007-2011

Hess Has Been Exploring Unconventional Oil and Natural Gas Resources to Map Long Term Growth

Hess has been mapping unconventional oil and natural gas resources to fuel the future global energy demand. Hess’s existing development activities in the Bakken shale, coupled with its joint venture agreement with Newfield Exploration in the Marcellus Shale, has redirected the company towards the development of unconventional resources; this, in turn, helps the company to build a balanced and a diversified oil and gas portfolio. Apart from these two shales, the company has been expanding its acreage footprints in Eagle ford, Utica Shale and other unconventional plays in the US.

Hess’s expansion plan in the unconventional resources development is quite clear from the company’s aggressive capital expenditure (capex) program for the shales. The company planned the capex of $3.4 billion for unconventional sources in 2011, accounting for 47% of its total capex, this was focused on development activities in Bakken, Eagle Ford, Utica shale. Consequently, the company has grown in terms of scale, infrastructure and export capacity in the Bakken shale play, with an average daily production of 30,000boe/d in 2011.

In order to continue its focus on unconventional assets, Hess has a capex plan of $2.5 billion for 2012. Through this, the company plans to invest $1.9 billion in the Bakken shale to double its production from this shale in 2012. The company expects that its productions from the Bakken shale will reach 120,000boe/d by 2015. The company plans to drill 25 to 30 wells in the Eagle Ford shale in 2012, 7 and 22 appraisal wells in the Utica shale on 100% owned acreage and 50/50 joint venture acreage, respectively.

The company has focused on unconventional opportunities across the geographies and has allocated 37% of its 2012 capex plan towards unconventional resources, reflecting its long term plan of Oil’s upstream portfolio is more inclined toward natural gas since past few years. Natural gas contributed an average of 73.8% to the company’s total production during 2009–2011. This indicates that Forest Oil is highly dependent on natural gas to grow its revenue, which exposes the company to fluctuations in natural gas prices.

Hess has a well diversified portfolio of shale assets with a substantial working interest in oil-rich shale assets. It holds 900,000 acres of working interest in the Bakken shale and is the operator of the shale. The company has plans to increase the rig count to 16 for further development of this shale. The company expects that its production from the Bakken shale will increase at the CAGR of more than 50% from 2010 to reach 120 Mboe/d by 2015.

In 2011, Hess reported an average production of 30 Mboe/d from the Bakken shale; this is expected to increase by 100% in 2012 to 60 Mboe/d. The company has consolidated its position as the second largest acreage holder in this shale, with enhanced infrastructure to support increased production capacity.