Amerada Hess Reports Results for the Fourth Quarter 2002

<< Back

01/30/2003

New York, New York....January 30, 2003....Amerada Hess Corporation (NYSE:AHC) reported a net loss, including special items, of $371 million for the fourth quarter of 2002 compared with income of $54 million for the fourth quarter of 2001. For the full year, the net loss was $218 million compared with income of $914 million in 2001. Operating earnings, excluding special items, amounted to income of $145 million for the fourth quarter of 2002 and $551 million for the year.

The after-tax results by major operating activity in 2002 and 2001 were as follows (in millions, except per share amounts):

	Three months ended December 31		Year ended December 31
	2002*	2001*	2002*	2001
Exploration and production	$ 174	$ 115	$ 752	$ 923
Refining and marketing	20	25	40	235
Corporate	(8)	(14)	(63)	(78)
Interest expense	(41)	(41)	(178)	(135)
Operating earnings	145	85	551	945
Special items	(516)	(31)	(769)	(31)
Net income (loss)	$ (371)	$ 54	$ (218)	$ 914
Net income (loss) per share	$ (4.20)	$ .61	$ (2.48)	$ 10.25
* Unaudited

The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 434,000 barrels per day in the fourth quarter of 2002, a decrease of 7% from the fourth quarter of 2001. Full year 2002 production averaged 451,000 barrels per day, an increase of 4% over last year. In the fourth quarter of 2002, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was approximately $24.70 per barrel, an increase of $3.65 per barrel from the fourth quarter of 2001. The average crude oil selling price for the full year of 2002 was $24.80 per barrel, an increase of $.50 per barrel from 2001. The Corporation's average United States natural gas selling price, including the effect of hedging, was $4.36 per Mcf in the fourth quarter of 2002, an increase of $1.49 per Mcf from the fourth quarter of 2001. The average United States natural gas selling price for the full year of 2002 was $3.65 per Mcf, a decrease of $.34 per Mcf from 2001.

Refining and marketing results for the year 2002 decreased compared with 2001, principally reflecting lower earnings from refining and retail gasoline station operations.

After-tax special items in 2002 and 2001 are summarized below (in millions):

	Three months ended December 31		Year ended December 31
	2002	2001	2002	2001
Asset impairments	$ (530)	$ --	$ (786)	$ --
Net gain from asset sales	14	--	82	--
Charge for increase in United Kingdom income tax rate	--	--	(43)	--
Reduction in carrying value of intangible assets	--	--	(14)	--
Charge related to Enron bankruptcy	--	(19)	--	(19)
Severance accrual	--	(12)	(8)	(12)
	$ (516)	$ (31)	$ (769)	$ (31)

The Corporation recorded an impairment charge of $530 million, after-tax, in the fourth quarter of 2002 to reduce the carrying value of the Ceiba field in Equatorial Guinea. The non-cash charge principally results from a reduction in probable reserves and higher field development costs associated with extending the field life. There was no revision to Ceiba's proved crude oil reserves. In the fourth quarter, the Corporation also recorded a gain from the sale of an interest in two small producing properties in Azerbaijan.

Sales and other operating revenues in the fourth quarter of 2002 amounted to $3,297 million compared with $2,881 million in the fourth quarter of 2001. Sales and other operating revenues for the year 2002 were $11,932 million compared with $13,413 million in 2001. Capital expenditures for the year 2002 amounted to $1,534 million, including $1,404 million for exploration and production activities. Capital expenditures for the year 2001 were $5,221 million, including $2,720 for the purchase of Triton Energy Limited.

Consolidated Financial Information
(unaudited)

	Three months ended December 31		Year ended December 31
	2002	2001	2002	2001
	(In millions, except per share amounts)
Sales and other operating revenues	$ 3,297	$ 2,881	$ 11,932	$ 13,413
Operating earnings	$ 145	$ 85	$ 551	$ 945
Special items	(516)	(31)	(769)	(31)
Net income (loss)	$ (371)	$ 54	$ (218)	$ 914
Net income (loss) per share	$ (4.20)	$ .61	$ (2.48)	$ 10.25
Weighted average number of shares	*88.4()**	88.7	*88.2()**	89.1
(*) Represents basic shares.

Amerada Hess Corporation and Consolidated Subsidiaries
Supplemental Financial Data
(unaudited - in millions)

Line	INCOME STATEMENT				Fourth Quarter 2002 (A)	Fourth Quarter 2001 (B)	Third Quarter 2002 (C)
No.	REVENUES AND OTHER NON-OPERATING INCOME
1		Sales and other operating revenues			$ 3,297	$ 2,881	$ 2,818
		Non-operating income
2			Gain on asset sales		14	--	63
3			Equity in income (loss) of HOVENSA L.L.C.		4	(19)	(6)
4			Other		32	23	20
5				Total revenues and other non-operating income	3,347	2,885	2,895

	COSTS AND EXPENSES
6		Cost of products sold			2,039	1,717	1,629
7		Production expenses			233	189	222
8		Marketing expenses			202	197	144
9		Exploration expenses, including dry holes and lease impairment			110	137	105
10		Other operating expenses			54	61	49
11		General and administrative expenses			61	118	72
12		Interest expense			65	62	64
13		Depreciation, depletion and amortization			309	303	342
14		Asset impairment			706	--	394
15				Total costs and expenses	3,779	2,784	3,021

16		Income (loss) before income taxes			(432)	101	(126)
17		Provision (benefit) for income taxes			(61)	47	10
18		Net income (loss)		$ (371)	$ 54	$ (136)

	SEGMENT ANALYSIS
19		Exploration and production			$ 174	$ 115	$ 181
20		Refining and marketing			20	25	3
21		Corporate			(8)	(14)	(23)
22		Interest expense			(41)	(41)	(40)
23		Operating earnings			145	85	121
24		Special items			(516)	(31)	(257)
25		Net income (loss)			$ (371)	$ 54	$ (136)

26	*Cash flow from operations ()**				$ 505	$ 433	$ 555

	CAPITAL EXPENDITURES
27		Exploration and production			$ 303	$ 488	$ 323
28		Refining and marketing			23	32	22
29				Total capital expenditures	$ 326	$ 520	$ 345

	AT END OF PERIOD
30		Total debt			$ 4,992	$ 5,665	$ 5,083

31		Stockholders' equity			$ 4,249	$ 4,907	$ 4,683

	(*) Net income (loss) adjusted for depreciation and amortization, asset impairment, exploratory dry holes, deferred income taxes, undistributed earnings of affiliates and net gain on asset sales.

Amerada Hess Corporation and Consolidated Subsidiaries
Supplemental Financial Data
(unaudited - in millions)

					Year
Line	INCOME STATEMENT				2002 (A)	2001 (B)
No.	REVENUES AND OTHER NON-OPERATING INCOME
1		Sales and other operating revenues			$ 11,932	$ 13,413
		Non-operating income
2			Gain on asset sales		117	--
3			Equity in income (loss) of HOVENSA L.L.C.		(47)	58
4			Other		91	142
5				Total revenues and other non-operating income	12,093	13,613

	COSTS AND EXPENSES
6		Cost of products sold			7,156	8,735
7		Production expenses			822	711
8		Marketing expenses			703	663
9		Exploration expenses, including dry holes and lease impairment			319	368
10		Other operating expenses			199	224
11		General and administrative expenses			256	313
12		Interest expense			269	194
13		Depreciation, depletion and amortization			1,320	967
14		Asset impairment			1,100	--
15				Total costs and expenses	12,144	12,175

16		Income (loss) before income taxes			(51)	1,438
17		Provision for income taxes			167	524
18		Net income (loss)			$ (218)	$ 914

19	Cash flow from operations				$ 2,074	$ 2,135

	CAPITAL EXPENDITURES
20		Exploration and production			$ 1,404	$ 5,061
21		Refining and marketing			130	160
22				Total capital expenditures	$ 1,534	$ 5,221

					December 31 2002	December 31 2001
	BALANCE SHEET INFORMATION
23		Current assets			$ 2,756	$ 3,946
24		Investments			1,622	1,636
25		Property, plant and equipment - net			7,032	8,165
26		Other assets			1,852	1,622
27				Total assets	$ 13,262	$ 15,369

28		Current portion of long-term debt			$ 16	$ 382
29		Other current liabilities			2,537	3,336
30		Long-term debt			4,976	5,283
31		Deferred liabilities and credits			1,484	1,461
32		Stockholders' equity excluding other comprehensive income			4,503	4,799
33		Accumulated other comprehensive income (loss)			(254)	108
34				Total liabilities and stockholders' equity	$ 13,262	$ 15,369

Amerada Hess Corporation and Consolidated Subsidiaries
Supplemental Operating Data
(in thousands, except for average selling prices)

Line	OPERATING DATA				Fourth Quarter 2002 (A)	Fourth Quarter 2001 (B)	Third Quarter 2002 (C)
No.	NET PRODUCTION PER DAY
		Crude oil - barrels
1			United States		48	62	53
2			United Kingdom		110	127	112
3			Equatorial Guinea		30	13	39
4			Norway		25	26	26
5			Denmark		28	23	20
6			Colombia		20	26	21
7			Algeria		18	11	15
8			Gabon		9	9	8
9			Indonesia		3	6	4
10			Azerbaijan		4	4	4
11				Total	295	307	302

		Natural gas liquids - barrels
12			United States		11	15	12
13			United Kingdom		6	7	5
14			Norway		1	1	1
15			Indonesia and Thailand		2	1	3
16				Total	20	24	21

		Natural gas - mcf
17			United States		320	436	355
18			United Kingdom		284	291	227
19			Denmark		39	45	30
20			Norway		25	27	28
21			Indonesia, Thailand and other		45	21	63
22				Total	713	820	703

23		Barrels of oil equivalent			434	468	441

	AVERAGE SELLING PRICE (including hedging)
		Crude oil - per barrel
24			United States		$ 23.11	$ 20.66	$ 26.19
25			Foreign		25.00	21.18	26.25

		Natural gas liquids - per barrel
26			United States		$ 20.68	$ 12.31	$ 16.31
27			Foreign		21.94	14.97	19.52

		Natural gas - per mcf
28			United States		$ 4.36	$ 2.87	$ 3.40
29			Foreign		2.52	2.65	2.17

	MARKETING AND REFINING - BARRELS PER DAY
30		Refined products sold			402	353	355
31		Refinery runs (net)			196	194	174

Amerada Hess Corporation and Consolidated Subsidiaries
Supplemental Operating Data
(in thousands, except for average selling prices)

					Year
Line	OPERATING DATA				2002 (A)	2001 (B)
No.	NET PRODUCTION PER DAY
		Crude oil - barrels
1			United States		54	63
2			United Kingdom		112	119
3			Equatorial Guinea		37	6
4			Norway		24	25
5			Denmark		23	20
6			Colombia		22	10
7			Algeria		15	13
8			Gabon		9	9
9			Indonesia		4	6
10			Azerbaijan		4	4
11				Total	304	275

		Natural gas liquids - barrels
12			United States		12	14
13			United Kingdom		6	7
14			Norway		1	1
15			Indonesia and Thailand		2	1
16				Total	21	23

		Natural gas - mcf
17			United States		373	424
18			United Kingdom		277	291
19			Denmark		37	43
20			Norway		25	25
21			Indonesia, Thailand and other		42	29
22				Total	754	812

23		Barrels of oil equivalent			451	433

	AVERAGE SELLING PRICE (including hedging)
		Crude oil - per barrel
24			United States		$ 24.06	$ 23.29
25			Foreign		24.94	24.58

		Natural gas liquids - per barrel
26			United States		$ 16.10	$ 18.64
27			Foreign		18.99	18.91

		Natural gas - per mcf
28			United States		$ 3.65	$ 3.99
29			Foreign		2.26	2.54

	MARKETING AND REFINING - BARRELS PER DAY
30		Refined products sold			383	387
31		Refinery runs (net)			181	202

Contact: Amerada Hess Corporation - C.T. Tursi (212) 536-8593

Press Release

Investor Relations