Hess Corporation Q1 2025 Results Summary

Key development:
Hess confirmed that Yellowtail, its fourth and largest development on the Stabroek Block in Guyana, is on track to start production in the third quarter of 2025 with a gross capacity of 250,000 barrels of oil per day. The ONE GUYANA FPSO arrived offshore on April 15, 2025.

Financial results:
Net income was $430 million ($1.39 per share), down from $972 million ($3.16 per share) in Q1 2024. Adjusted net income was $559 million ($1.81 per share). Total revenues fell to $2.94 billion from $3.34 billion a year ago. Capital and exploratory expenditures for exploration and production rose to $1.09 billion from $927 million.

Production and prices:
Total net production held steady at 476,000 barrels of oil equivalent per day. Average realized oil price fell to $71.22 per barrel from $80.06. Natural gas liquids averaged $24.08 per barrel, up from $22.97. Natural gas rose to $4.89 per mcf from $4.62.

Regional performance:
- Bakken production rose to 195,000 boepd from 190,000. Hess drilled 28 wells and brought 32 online. Q2 guidance is 210,000–215,000 boepd.
- Gulf of Mexico production rose to 41,000 boepd from 31,000 due to the Pickerel well startup.
- Guyana net production was 183,000 bopd, down from 190,000 due to fewer tax barrels. Q2 guidance is 180,000 bopd with 15 cargos expected to be sold.
- Southeast Asia production fell to 57,000 boepd from 65,000.

Costs:
Cash operating costs rose to $12.27 per barrel of oil equivalent from $10.79, primarily due to higher maintenance in North Dakota. Q2 costs are expected to be higher due to additional workover activity in the Gulf and Southeast Asia.

Midstream:
Midstream income rose slightly to $70 million from $67 million. Hess Midstream Operations issued $800 million in new 5.875% notes to redeem 2026 debt. Hess’s consolidated ownership in HESM remains at approximately 37.8%.

Liquidity and cash flow:
Hess had $1.3 billion in cash and $5.3 billion in debt (excluding midstream). Consolidated debt stood at $8.7 billion. Operating cash flow was $1.4 billion, up from $885 million. Excluding changes in working capital, operating cash flow was $1.32 billion, down from $1.73 billion. Capital expenditures were $1.09 billion.

Legal item:
Hess took a $129 million after-tax charge related to expected settlement of legal claims in North Dakota.

Outlook:
Total 2025 E&P capital spending remains projected at $4.5 billion. Q2 production is expected between 480,000 and 490,000 boepd. The company will not host an earnings call due to its pending merger with Chevron.

Hess Corporation (NYSE: HES) announced today that on Wednesday, April 30 it will issue its first quarter earnings press release and post supplemental earnings information on its website at www.hess.com.

The company will not hold a conference call due to the definitive agreement announced on October 23, 2023 for Hess to be acquired by Chevron, subject to the agreement’s closing conditions.

GOVERNMENT OF GUYANA, MOUNT SINAI, AND HESS EXTEND NATIONAL HEALTHCARE INITIATIVE THROUGH 2030

The Government of Guyana, Mount Sinai Health System, and Hess Corporation have announced a five-year extension of their national healthcare initiative, originally launched in 2022. The program aims to transform Guyana’s public health system by 2030, making world-class healthcare accessible to all citizens, with a strong focus on vulnerable communities.

The next phase includes the creation of a national cancer center, modernization of health facilities such as Georgetown Public Hospital, and implementation of one of the world’s most advanced digital health systems.

Achievements from the first phase include 35,000 child health screenings, the upcoming graduation of nearly 900 nursing assistants, and the establishment of a state-of-the-art pathology lab. Key future priorities will focus on cancer care, women’s and children’s health, community-based services, quality improvement, digital infrastructure, and workforce capacity building.

The initiative is led by Mount Sinai’s Arnhold Institute for Global Health and funded jointly by Hess Corporation and the Guyanese government. Leaders from all three institutions emphasized their continued commitment to delivering high-quality, equitable healthcare and setting a global model for public-private health partnerships.

Chevron Corporation has announced the purchase of 15,380,000 shares of Hess Corporation common stock in open market transactions between January and March 2025. This represents approximately 4.99% of Hess's outstanding shares as of January 31, 2025. These purchases were made at a discount to the exchange ratio set in the merger agreement between Chevron and Hess, which was signed on October 22, 2023. The acquisitions reflect Chevron’s confidence in the completion of its pending acquisition of Hess. These purchases are in addition to Chevron’s ongoing stock repurchase program for the first quarter of 2025.

Chevron also issued a cautionary statement regarding forward-looking information, outlining risks such as market conditions, regulatory approvals, geopolitical conflicts, and operational uncertainties that could impact the Hess transaction and other business operations.

Hess Corporation Announces Executive Compensation Decisions for 2025 Annual Incentive Plan and Long-Term Incentive Program
New York, NY – March 6, 2025 – Hess Corporation (NYSE: HES) today announced that its Compensation and Management Development Committee has approved the 2025 Annual Incentive Plan (AIP) and Long-Term Incentive Program (LTIP) for its executive leadership team and full-time employees worldwide.

Annual Incentive Plan (AIP)
The Annual Incentive Plan is designed to align compensation with performance and shareholder value creation. Under the plan, incentive payouts will be based on the achievement of pre-established enterprise metrics and individual performance objectives. The enterprise-wide performance metrics for 2025 include:

Environment, Health & Safety (EHS) Metrics

Bakken routine flare rate
Critical inspection compliance
Severe + significant safety incident rate
Loss of primary containment rate
Safety observations
Operational and Financial Metrics

Controllable production
Exploration and production capital and exploratory spend
Controllable operated cash costs
Additionally, the enterprise-wide performance modifier can adjust payout levels by up to 25% based on the following strategic themes:

Strategy execution
Capital allocation and risk management
Social responsibility and stakeholder engagement
Culture, people, and leadership
Environment and sustainability
For Named Executive Officers, payout ranges from 0% to 200% of the target, determined by a combination of enterprise metric performance, strategic performance modification, and individual performance assessments.

Long-Term Incentive Program (LTIP)
The 2025 LTIP has been adjusted to reflect Hess Corporation’s pending merger with Chevron Corporation. As a result, the Named Executive Officers, including CEO John Hess, have received restricted stock grants rather than the standard mix of long-term incentive awards. These restricted stock awards will vest in equal installments over three years, beginning on the first anniversary of the grant date.

In the event of certain terminations of employment, the restricted stock awards will be subject to accelerated vesting, per the terms of Hess Corporation’s 2017 Long-Term Incentive Plan.

Hess remains committed to strong corporate governance and pay-for-performance principles to drive continued shareholder value as it prepares for the pending transaction with Chevron.

Hess Corporation's Compensation and Management Development Committee has approved the 2025 annual incentive targets and long-term incentive awards for its executives and employees. The annual incentive plan aligns pay with performance based on enterprise-level metrics and individual goals, covering areas such as environment, health and safety, controllable production, capital spending, and operating cash costs. The payout can range from 0% to 200% of the target, with a performance modifier of up to ±25% based on strategic execution, capital allocation, social responsibility, leadership, and sustainability.

Under the long-term incentive program, due to Hess's pending merger with Chevron, executives received restricted stock awards that vest over three years. These awards may be subject to accelerated vesting under specific termination conditions. The incentive plans are part of Hess's commitment to driving long-term shareholder value and operational excellence.

Hess Corporation reported a net income of $542 million, or $1.76 per share, in the fourth quarter of 2024, an increase from $413 million, or $1.34 per share, in the same period of 2023. The company's oil and gas net production rose 18% year over year to 495,000 barrels of oil equivalent per day (boepd), driven by strong performance in the Bakken and Guyana. Production in the Bakken increased by 7% to 208,000 boepd, while Guyana's net production surged 52% to 195,000 barrels of oil per day (bopd).

The Exploration & Production (E&P) segment reported net income of $529 million in the fourth quarter, compared to $512 million in the prior-year quarter. The company's realized crude oil price, including hedging, was $72.10 per barrel, down from $76.63 per barrel in the previous year. Natural gas liquids (NGL) prices increased to $23.05 per barrel, while natural gas prices fell to $4.10 per mcf.

E&P capital and exploratory expenditures totaled $1.68 billion, including the purchase of the Liza Destiny and Prosperity floating production, storage, and offloading (FPSO) vessels for $635 million. The company estimates its year-end proved reserves at 1.44 billion barrels of oil equivalent, with an organic reserve replacement of 138% at a finding and development cost of $19.67 per boe.

The Midstream segment reported net income of $74 million, up from $63 million in the previous year. Hess Corporation’s debt-to-capitalization ratio improved to 28.3% at the end of 2024, down from 33.6% a year earlier. The company generated $1.31 billion in net cash from operating activities in the quarter and $5.6 billion for the full year.

Looking ahead, first-quarter 2025 E&P net production is expected to range between 465,000 and 475,000 boepd due to planned maintenance in Guyana and the impact of winter weather in the Bakken. Full-year 2025 E&P capital and exploratory expenditures are projected to be approximately $4.5 billion.

Hess Corporation did not host a conference call for its quarterly results due to its pending merger with Chevron.