Hess Profit Rises on Asset Sales
Hess Corporation today reported net income of $1,276 million for the quarter ended March 31, 2013. Adjusted earnings, which exclude gains on asset sales and other items affecting comparability of earnings between periods, were $669 million, or $1.95 per common share, representing a 30 percent increase on a per share basis over the same quarter last year.
The Company continues to make progress on its asset sales. In the first quarter, the Corporation completed the sales of its interests in the Beryl area fields in the United Kingdom North Sea, the Azeri-Chirag-Guneshli (ACG) fields in Azerbaijan, and announced the sale of its acreage in the Eagle Ford shale play in Texas, relieving Hess of approximately $500 million of future capital requirements over the next three years. On April 1, Hess announced an agreement to sell 100 percent of its Russian subsidiary, Samara-Nafta, for $2.05 billion, with total proceeds to Hess of $1.8 billion based on its 90 percent interest. Including Samara-Nafta, total year-to-date proceeds from asset sales amount to approximately $3.4 billion. Hess continues to make progress on the process to divest its upstream assets in Indonesia and Thailand, as well as its terminals, retail, energy marketing and trading businesses in the downstream.
“Our first quarter results demonstrate our strong operating performance across the company. In addition, we continue to execute our multi-year transformation into a more focused, higher growth, lower risk, pure play E&P company and are making excellent progress toward delivering our forecast of 5 to 8 percent compound average annual growth in production,” said John B. Hess, Chairman and CEO. “We continue to focus our E&P portfolio by divesting assets that do not fit our growth profile. By applying proceeds from the sales that we have announced or completed so far this year to reduce debt and strengthen our balance sheet, we will have the financial flexibility both to fund future growth and direct most of the proceeds from additional asset sales to returning capital directly to shareholders. We expect to begin repurchasing shares under our existing $4 billion authorization in the second half of this year.”