Amareda Hess Corp., now simply called Hess Corp., is a global integrated energy company that produces, purchases, transports and sells crude oil and natural gas and refined petroleum products. The company -- one of IndustryWeek's 50 Best Manufacturing Companies for 2006 -- reported net income of $370 million for the first quarter of 2007 compared with net income of $699 million for the first quarter of 2006.
According to the New York company's first-quarter 2007 conference call, which took place April 25, first-quarter 2007 financial results were lower than the year-ago quarter as a result of weaker commodity prices and higher production costs.
Exploration and production earnings were $340 million in the first quarter of 2007 compared with $706 million in the first quarter of 2006. The corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 382,000 barrels per day in the first quarter of 2007 compared with 361,000 barrels per day in the first quarter of 2006.
"Our worldwide oil and natural gas production is expected to be affected by several factors: reductions in the second and third quarter will result from the sale of our interest in fields in the United Kingdom North Sea; a decision to reduce natural gas sales from the Cromarty field during the second and third quarter in response to market conditions in the United Kingdom; the scheduled maintenance of our North Sea facilities and a 40-day planned shutdown at the Malaysia Thailand joint development area during the third quarter to install facilities required for phase two developments," said John Hess, CEO and Chairman of the board for Hess Corp., during the earnings call.
Looking at the balance of the year, worldwide production is anticipated to average in the range of 350,000 to 360,000 barrels of oil equivalent per day for the second and third quarters, and then to increase to more than 400,000 for the fourth quarter, Hess noted.
| At A Glance Hess Corp. New York Primary Industry: Petroleum and Coal Products Number of Employees: 11,610 2005 In Review Revenue: $22.9 billion Profit Margin: 5.43% Sales Turnover: 1.20 Inventory Turnover: 23.49 Revenue Growth: 35.52% Return On Assets: 7.61% Return On Equity: 22.19% |
Growth during the year will come from the ramp up in production from the Okume complex off the coast of Equatorial Guinea, the start-up of natural gas production in the Pangkah Field in Indonesia and the commencement of production from the Genghis Khan field in deepwater Gulf of Mexico in the third quarter, Hess added.
Hess Corp. purchased the Genghis Khan oil and gas development in the deepwater Gulf of Mexico from Anadarko Petroleum Corp. for $1.35 billion in November 2006. Hess' net investment for its 28% interest in the acquisition will be $378 million.
Genghis Khan has estimated gross hydrocarbon reserves in the range of 65 million to 170 million barrels of oil equivalent. The field has two wells and development infrastructure in place. First oil is expected in mid-2007.
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