Fourth Quarter Financial and Operational Highlights:

• Net loss was $97 million, or $0.32 per common share, compared with a net loss of $222 million, or $0.73 per common share in the fourth quarter of 2019
• Adjusted net loss was $176 million, or $0.58 per common share, compared with an adjusted net loss of $180 million, or $0.60 per common share in the prior-year quarter
• Completed the sale of the Corporation's 28% working interest in the Shenzi Field in the deepwater Gulf of Mexico for net proceeds of $482 million, after closing adjustments
• Oil and gas net production, excluding Libya, averaged 309,000 barrels of oil equivalent per day (boepd), down from 316,000 boepd in the fourth quarter of 2019; Bakken net production was 189,000 boepd, up 9% from 174,000 boepd in the prior-year quarter
• Production from Phase 1 of the Liza Field development on the Stabroek Block, offshore Guyana, reached its nameplate capacity of 120,000 gross barrels of oil per day (bopd) in December
• E&P capital and exploratory expenditures were $371 million, compared with $876 million in the prior-year quarter
• Cash and cash equivalents, excluding Midstream, were $1.74 billion at December 31, 2020
• Year-end proved reserves were 1,170 million barrels of oil equivalent (boe); organic reserve replacement for 2020 was 95% (158% excluding price revisions)

2021 Guidance:

• Net production, excluding Libya, is forecast to be approximately 310,000 boepd
• E&P capital and exploratory expenditures are expected to be $1.9 billion

Hess Corporation today reported a net loss of $97 million, or $0.32 per common share, in the fourth quarter of 2020, compared with a net loss of $222 million, or $0.73 per common share, in the fourth quarter of 2019. On an adjusted basis, the Corporation reported a net loss of $176 million, or $0.58 per common share, in the fourth quarter of 2020, compared with an adjusted net loss of $180 million, or $0.60 per common share, in the prior-year quarter. Adjusted after-tax results reflect reductions in operating costs, exploration expense and depreciation, depletion and amortization expenses compared with the fourth quarter of 2019, which were largely offset by lower realized crude oil selling prices in the fourth quarter of 2020.

“We are successfully executing our strategy which has positioned our company to deliver industry leading cash flow growth over the next decade,” CEO John Hess said. “In 2021, our priorities remain to preserve cash, capability and the long term value of our assets, with more than 80% of our capital expenditures allocated to our high return investments in Guyana and the Bakken.”

Exploration and Production:

E&P net loss was $39 million in the fourth quarter of 2020, compared with a net loss of $64 million in the fourth quarter of 2019. On an adjusted basis, E&P's fourth quarter 2020 net loss was $118 million, compared with an adjusted net loss of $124 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, excluding the effect of hedging, was $39.45 per barrel in the fourth quarter of 2020, compared with $55.05 per barrel in the prior-year quarter, primarily reflecting a decrease in benchmark oil prices. Crude oil hedging activities improved after-tax results by $112 million in the fourth quarter of 2020, compared with losses of $2 million in the fourth quarter of 2019. Including hedging, the Corporation’s average realized crude oil selling price was $45.32 per barrel in the fourth quarter of 2020, compared with $54.90 per barrel in the year-ago quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2020 was $15.80 per barrel, compared with $13.87 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.35 per mcf, compared with $3.48 per mcf in the fourth quarter of 2019.

Net production, excluding Libya, was 309,000 boepd in the fourth quarter of 2020, compared with 316,000 boepd in the fourth quarter of 2019. Production from Libya resumed in the fourth quarter of 2020 and averaged a net rate of 12,000 boepd compared with 22,000 boepd in the fourth quarter of 2019.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $11.31 per boe in the fourth quarter of 2020, down 10% from $12.59 per boe in the prior-year quarter due to cost reduction initiatives and lower production and severance taxes. Cash operating costs in the fourth quarter of 2020 included workover and hurricane-related maintenance costs in the Gulf of Mexico.

Oil and Gas Reserves Estimates:

Oil and gas proved reserves at December 31, 2020, which are subject to final review, were 1,170 million boe, compared with 1,197 million boe at December 31, 2019. Net proved reserve additions in 2020 of 117 million boe included net negative revisions of 79 million boe due to lower commodity prices. The net additions were primarily related to Guyana, which included the sanction of the Payara development in 2020. Excluding asset sales, the Corporation replaced 95% of its 2020 production (158% excluding price revisions) at a finding and development cost of approximately $15.25 per boe (approximately $9.10 per boe excluding price revisions).

Exploration and Production:

E&P net loss was $39 million in the fourth quarter of 2020, compared with a net loss of $64 million in the fourth quarter of 2019. On an adjusted basis, E&P's fourth quarter 2020 net loss was $118 million, compared with an adjusted net loss of $124 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, excluding the effect of hedging, was $39.45 per barrel in the fourth quarter of 2020, compared with $55.05 per barrel in the prior-year quarter, primarily reflecting a decrease in benchmark oil prices. Crude oil hedging activities improved after-tax results by $112 million in the fourth quarter of 2020, compared with losses of $2 million in the fourth quarter of 2019. Including hedging, the Corporation’s average realized crude oil selling price was $45.32 per barrel in the fourth quarter of 2020, compared with $54.90 per barrel in the year-ago quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2020 was $15.80 per barrel, compared with $13.87 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.35 per mcf, compared with $3.48 per mcf in the fourth quarter of 2019.

Net production, excluding Libya, was 309,000 boepd in the fourth quarter of 2020, compared with 316,000 boepd in the fourth quarter of 2019. Production from Libya resumed in the fourth quarter of 2020 and averaged a net rate of 12,000 boepd compared with 22,000 boepd in the fourth quarter of 2019.

Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $11.31 per boe in the fourth quarter of 2020, down 10% from $12.59 per boe in the prior-year quarter due to cost reduction initiatives and lower production and severance taxes. Cash operating costs in the fourth quarter of 2020 included workover and hurricane-related maintenance costs in the Gulf of Mexico.

Oil and Gas Reserves Estimates:

Oil and gas proved reserves at December 31, 2020, which are subject to final review, were 1,170 million boe, compared with 1,197 million boe at December 31, 2019. Net proved reserve additions in 2020 of 117 million boe included net negative revisions of 79 million boe due to lower commodity prices. The net additions were primarily related to Guyana, which included the sanction of the Payara development in 2020. Excluding asset sales, the Corporation replaced 95% of its 2020 production (158% excluding price revisions) at a finding and development cost of approximately $15.25 per boe (approximately $9.10 per boe excluding price revisions).

Operational Highlights for the Fourth Quarter of 2020:

Bakken (Onshore U.S.): Net production from the Bakken increased to 189,000 boepd from 174,000 boepd in the prior-year quarter. Net oil production was 97,000 bopd compared with 106,000 bopd in the fourth quarter of 2019, primarily due to decreased drilling and completion activity as a result of reducing the number of operated rigs from six to one in May 2020. Natural gas and NGL production increased from additional natural gas captured and processed, and approximately 6,000 boepd of additional volumes received under percentage of proceeds contracts resulting from lower prices. The Corporation operated one rig in the fourth quarter, drilling 7 wells, completing 8 wells, and bringing 12 new wells online.

The Corporation chartered three very large crude carriers (VLCCs) to transport and store a total of 6.3 million barrels of Bakken crude oil produced during the second and third quarters of 2020 for sale in Asian markets. The first VLCC cargo of 2.1 million barrels was sold in September and cash proceeds were received in October. In December, the Corporation entered into agreements to sell the second and third VLCC cargos totaling 4.2 million barrels for delivery in the first quarter of 2021. The sales, including associated hedging gains and costs will be recognized, and cash proceeds will be received, in the first quarter of 2021.

Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 32,000 boepd, compared with 70,000 boepd in the prior-year quarter reflecting downtime for hurricane-related maintenance in the quarter and lower production from the Shenzi Field, which was sold in November 2020 for net proceeds of $482 million. Net production from the Shenzi Field was 3,000 boepd in the fourth quarter of 2020 compared with 12,000 boepd in the fourth quarter of 2019.

Guyana (Offshore): At the Stabroek Block (Hess – 30%), the Corporation’s net production from the Liza Field, which commenced in December 2019, averaged 26,000 bopd in the fourth quarter of 2020. The operator, Esso Exploration and Production Guyana Limited, completed the commissioning of the natural gas injection system allowing the Liza Destiny floating production, storage and offloading vessel (FPSO) to reach its nameplate capacity of 120,000 gross bopd in December. Phase 2 of the Liza Field development, which will utilize the Liza Unity FPSO with an expected capacity of 220,000 gross bopd, remains on target to achieve first oil by early 2022. The Payara development was sanctioned in September 2020 and will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first oil targeted in 2024.

At the Kaieteur Block (Hess – 15%), the operator, Esso Exploration and Production Guyana Limited, completed drilling of the Tanager-1 exploration well, which did not encounter commercial quantities of hydrocarbons on a stand-alone basis. Fourth quarter results include a charge of $14 million in exploration expense for well costs incurred. At the Stabroek Block, the Hassa-1 well encountered approximately 50 feet of oil bearing reservoir in deeper geologic intervals, although the well did not encounter oil in the primary target areas. Well data will be incorporated into future exploration and development planning.

After drilling the Tanager-1 well, the Stena Carron drillship completed appraisal work at the Redtail-1 well before moving to the Canje Block, offshore Guyana. After drilling the Hassa-1 well, the Noble Don Taylor drillship began development drilling at Liza Phase 2. The Noble Bob Douglas and the Noble Tom Madden drillships are currently drilling and completing Liza Phase 2 development wells.

Malaysia and JDA (Offshore): Net production at the North Malay Basin and JDA was 56,000 boepd, compared with 64,000 boepd in the prior-year quarter, reflecting COVID-19 impacts on economic activity in Malaysia and Thailand which reduced natural gas nominations.

Midstream:

The Midstream segment had net income of $62 million in the fourth quarter of 2020, compared with net income of $33 million in the prior-year quarter. On an adjusted basis, fourth quarter 2019 net income was $49 million. The improved fourth quarter 2020 results were primarily driven by higher volumes and tariff rates, and lower maintenance expenses.

Capital and Exploratory Expenditures:

E&P capital and exploratory expenditures were $371 million in the fourth quarter of 2020, down from $876 million in the prior-year quarter. The decrease is primarily driven by a reduced rig count in the Bakken and lower activity in the Gulf of Mexico. Midstream capital expenditures were $51 million in the fourth quarter of 2020, down from $108 million in the prior-year quarter.

KeyFacts Energy: Hess US country profile