Hess Reports Estimated Results for the Fourth Quarter of 2024

Fourth Quarter Financial and Operational Highlights:

• Net income was $542 million, or $1.76 per share, compared with $413 million, or $1.34 per share, in the fourth quarter of 2023; adjusted net income¹ in the fourth quarter of 2023 was $501 million, or $1.63 per share
• Oil and gas net production was 495,000 barrels of oil equivalent per day (boepd), up 18% from 418,000 boepd in the fourth quarter of 2023
• Bakken net production was 208,000 boepd, up 7% from 194,000 boepd in the fourth quarter of 2023
• Guyana net production was 195,000 barrels of oil per day (bopd), up 52% from 128,000 bopd in the fourth quarter of 2023
• E&P capital and exploratory expenditures were $1,677 million, including the purchases of the Liza Destiny and Prosperity floating production, storage and offloading vessels (FPSOs) for approximately $635 million, compared with $1,480 million in the prior-year quarter, which included the purchase of the Liza Unity FPSO for approximately $380 million
• Year-end proved reserves are estimated to be 1.44 billion barrels of oil equivalent (boe); organic reserve replacement was 138% at a finding and development cost of $19.67 per boe

Hess Corporation (NYSE:HES) today reported net income of $542 million, or $1.76 per share, in the fourth quarter of 2024, compared with net income of $413 million, or $1.34 per share, in the fourth quarter of 2023. On an adjusted basis, the Corporation reported net income of $501 million, or $1.63 per share, in the fourth quarter of 2023. The increase in adjusted after-tax earnings compared with the prior-year quarter primarily reflects higher production volumes, partially offset by lower realized selling prices and higher exploration expenses in the fourth quarter of 2024.

   After-tax income (loss) by major operating activity was as follows:

Exploration and Production:

   E&P net income was $529 million in the fourth quarter of 2024, compared with $512 million in the fourth quarter of 2023. On an adjusted basis, E&P net income was $531 million in the fourth quarter of 2023. The Corporation's average realized crude oil selling price, including the effect of hedging, was $72.10 per barrel in the fourth quarter of 2024, compared with $76.63 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2024 was $23.05 per barrel, compared with $20.92 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.10 per mcf, compared with $4.51 per mcf in the fourth quarter of 2023.

   Net production was 495,000 boepd in the fourth quarter of 2024, compared with 418,000 boepd, in the fourth quarter of 2023, primarily due to higher production in Guyana and the Bakken. In the first quarter of 2025, E&P net production is expected to be in the range of 465,000 boepd to 475,000 boepd, reflecting planned maintenance and lower tax barrels at Guyana and the impact of winter weather in the Bakken.

   Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $12.95 per boe in the fourth quarter of 2024, compared with $13.29 per boe in the prior-year quarter.

Oil and Gas Reserves Estimates:

   Oil and gas proved reserves at December 31, 2024, which are subject to final review, were 1.44 billion boe, compared with 1.37 billion boe at December 31, 2023. Net proved reserve additions and revisions in 2024 totaled 247 million boe, primarily from Guyana and the Bakken. The Corporation replaced 138% of its 2024 production at a finding and development cost of $19.67 per boe.

Operational Highlights for the Fourth Quarter of 2024:

   Bakken (Onshore U.S.): Net production from the Bakken was 208,000 boepd in the fourth quarter of 2024, compared with 194,000 boepd in the prior-year quarter, primarily reflecting increased drilling and completion activity. NGL and natural gas volumes received under percentage of proceeds contracts were 20,000 boepd in the fourth quarter of 2024, compared with 19,000 boepd in the prior-year quarter. During the fourth quarter of 2024, the Corporation operated four rigs and drilled 35 wells, completed 26 wells, and brought 29 new wells online. The Corporation plans to continue operating four drilling rigs in 2025. Bakken net production is forecasted to be in the range of 195,000 boepd to 200,000 boepd in the first quarter of 2025, reflecting the impact of winter weather.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 30,000 boepd in both the fourth quarter of 2024 and the fourth quarter of 2023. In late December, drilling was completed at the Vancouver exploration well (Hess – 40%) located in Green Canyon Block 287, which did not encounter commercial quantities of hydrocarbons. Fourth quarter 2024 results include $92 million in exploration expense for well costs incurred through December 31, 2024.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production totaled 195,000 bopd² in the fourth quarter of 2024, compared with 128,000 bopd² in the prior-year quarter, primarily due to start-up of the third development on the block, Payara, which commenced production in November 2023. Guyana net production is forecasted to be in the range of 180,000 bopd² to 185,000 bopd² in the first quarter of 2025, reflecting planned maintenance at the Payara development and lower tax barrels of approximately 9,000 bopd in the first quarter of 2025 as compared with the fourth quarter of 2024. In the fourth quarter of 2024, 16 cargos of crude oil were sold from Guyana, compared with 10 cargos in the prior-year quarter. In the first quarter of 2025, 14 cargos of crude oil are expected to be sold.

   The fourth development on the block, Yellowtail, was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production expected in the fourth quarter of 2025. The fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd and first production expected in 2026. The sixth development, Whiptail, was sanctioned in April 2024 and is expected to add production capacity of approximately 250,000 gross bopd by the end of 2027. The application for the environmental permit for the seventh development, Hammerhead, has been filed with Guyana's Environmental Protection Agency. Pending government and regulatory approval and project sanctioning, the development is expected to have a production capacity in the range of 120,000 to 180,000 gross bopd, with first oil anticipated in 2029.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 62,000 boepd in the fourth quarter of 2024, compared with 66,000 boepd in the prior-year quarter.

Midstream:

   The Midstream segment had net income of $74 million in the fourth quarter of 2024, compared with net income of $63 million in the prior-year quarter.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $61 million in the fourth quarter of 2024, compared with $162 million in the fourth quarter of 2023. On an adjusted basis, after-tax expense for Corporate, Interest and Other was $93 million in the fourth quarter of 2023. The decrease in after-tax expense on an adjusted basis compared with the prior-year quarter primarily reflects higher capitalized interest in the fourth quarter of 2024.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $1,677 million in the fourth quarter of 2024, including the purchases of the Liza Destiny and Prosperity FPSOs for approximately $635 million, compared with $1,480 million in the prior-year quarter, which included the purchase of the Liza Unity FPSO for approximately $380 million. Full year 2025 E&P capital and exploratory expenditures are expected to be approximately $4.5 billion, which includes capitalized interest of approximately $240 million.

   Midstream capital expenditures were $84 million in the fourth quarter of 2024 and $72 million in the prior-year quarter.

Liquidity:

   Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $1.2 billion and debt and finance lease obligations totaling $5.3 billion at December 31, 2024. The Midstream segment had cash and cash equivalents of $5 million and total debt of $3.5 billion at December 31, 2024. The Corporation's debt to capitalization ratio as defined in its debt covenants was 28.3% at December 31, 2024 and 33.6% at December 31, 2023.

   Net cash provided by operating activities was $1,312 million in the fourth quarter of 2024, compared with $1,344 million in the prior-year quarter. Net cash provided by operating activities before changes in operating assets and liabilities³ was $1,521 million in the fourth quarter of 2024, compared with $1,239 million in the prior-year quarter, primarily due to higher production volumes, partially offset by lower realized selling prices in the fourth quarter of 2024. Changes in operating assets and liabilities decreased cash flow from operating activities by $209 million during the fourth quarter of 2024 and increased cash flow from operating activities by $105 million during the prior-year quarter.

Items Affecting Comparability of Earnings Between Periods:

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

   Fourth Quarter 2023: E&P results included a pre-tax charge of $52 million ($52 million after income taxes) to write off the Huron exploration well in the Gulf of Mexico, which was completed in 2022, based on the decision by the Corporation and its partners in the fourth quarter of 2023 to exit the project. E&P results also included a noncash income tax benefit of $33 million resulting from the reversal of a valuation allowance against net deferred tax assets in Malaysia.

   Corporate and other results included a pre-tax charge of $52 million ($52 million after income taxes) for litigation related costs associated with the Corporation's former downstream business, HONX, Inc., which are included in General and administrative expenses in the income statement. Corporate and other results also included a noncash charge to recognize unamortized pension actuarial losses of $17 million ($17 million after income taxes) resulting from the payment of lump sums to certain participants in the pension plan. The charge is included in Other, net in the income statement.

Reconciliation of U.S. GAAP to Non-GAAP Measures:

   The following table reconciles reported net income attributable to Hess Corporation and adjusted net income:

   The following table reconciles reported net cash provided by (used in) operating activities from net cash provided by (used in) operating activities before changes in operating assets and liabilities:

   Due to the pending merger with Chevron Corporation (Chevron), the Corporation will not host a conference call to review its fourth quarter 2024 results.

   Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.

Forward-looking Statements

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "estimate," "expect," "forecast," "guidance," "could," "may," "should," "would," "believe," "intend," "project," "plan," "predict," "will," "target" and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation: our future financial and operational results; our business strategy; estimates of our crude oil and natural gas reserves and levels of production; benchmark prices of crude oil, NGL and natural gas and our associated realized price differentials; our projected budget and capital and exploratory expenditures; expected timing and completion of our development projects; information about sustainability goals and targets and planned social, safety and environmental policies, programs and initiatives; future economic and market conditions in the oil and gas industry; and expected timing and completion of our proposed merger with Chevron.

Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: fluctuations in market prices of crude oil, NGL and natural gas and competition in the oil and gas exploration and production industry; reduced demand for our products, including due to perceptions regarding the oil and gas industry, competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring, fracking bans as well as restrictions on oil and gas leases; operational changes and expenditures due to climate change and sustainability related initiatives; disruption or interruption of our operations due to catastrophic and other events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks, public health measures, or climate change; the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures under which we may not control and exposure to decommissioning liabilities for divested assets in the event the current or future owners are unable to perform; unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits; availability and costs of employees and other personnel, drilling rigs, equipment, supplies and other required services; any limitations on our access to capital or increase in our cost of capital, including as a result of limitations on investment in oil and gas activities, rising interest rates or negative outcomes within commodity and financial markets; liability resulting from environmental obligations and litigation, including heightened risks associated with being a general partner of HESM; risks and uncertainties associated with our proposed merger with Chevron; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission (SEC).

As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Non-GAAP financial measures

The Corporation has used non-GAAP financial measures in this earnings release. "Adjusted net income" presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. "Net cash provided by (used in) operating activities before changes in operating assets and liabilities" presented in this release is defined as Net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income to evaluate the Corporation's operating performance and believes that investors' understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by (used in) operating activities before changes in operating assets and liabilities demonstrates the Corporation's ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income or net cash provided by (used in) operating activities. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income, and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess Corporation's Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.