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Scotia Howard Weil Conference – Hess Corp

Hess Corp · Mar 26, 2019 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Scotia Howard Weil Conference – Hess Corp – slide 1
    Hess Corporation SCOTIA HOWARD WEIL ENERGY CONFERENCE March 26, 2019
  2. Scotia Howard Weil Conference – Hess Corp – slide 2
    Hess Strategic Priorities Invest only in High Return, Low Cost Opportunities Prioritize Return Build Focused and of Capital to Balanced Portfolio Shareholders Robust at Low Prices Commitment to Sustainability Grow Free…
  3. Scotia Howard Weil Conference – Hess Corp – slide 3
    Why Hess Balance between growth engines and cash engines leverage to Brent oil pricing Focused, High Return 20% cash flow CAGR, 10% production CAGR, through 20251 Portfolio Structurally lowering costs…
  4. Scotia Howard Weil Conference – Hess Corp – slide 4
    Sustainability Focus Across Our Company Values drive value Safety Climate Change & Environment Social Responsibility Enterprise-wide focus on Board evaluates Fundamental to the way we do continuous improvement to sustainability risks…
  5. Scotia Howard Weil Conference – Hess Corp – slide 5
    Sustained Growth in Production & Cash Flow 20% cash flow CAGR outpaces 10% production CAGR through 2025 Production1 MBOED 2017 to 20251 Guyana growing Production grows at 10% CAGR to 750 MBOD 600 Cash flow grows at 20% CAGR 10% gross…
  6. Scotia Howard Weil Conference – Hess Corp – slide 6
    Leverage to High Value Brent Oil Leading liquids weighted resource base Leading Liquids Weighting Among Peers Liquids % of Commercial Resources1 Liquids 80% of 80% production mix by 2025 40% Brent pricing exposure increasing to 65%…
  7. Scotia Howard Weil Conference – Hess Corp – slide 7
    Continuing Reduction in Unit Costs Significant cost reductions, improved profitability Cash Costs1 /BOE 30% reduction 15 Investing in low unit cost assets 10 Divested higher 5 cost assets - 2017 2018 2019 2020 2021 50%…
  8. Scotia Howard Weil Conference – Hess Corp – slide 8
    Significant Free Cash Flow Growth Cash returns increase more than 250% by 2025 CFFO billions Significant Investment Return of Capital CROCE at 65/bbl cash flow growth 8 30% Brent 20% CAGR CROCE 25% 75/bbl through 20252 6 65/bbl…
  9. Scotia Howard Weil Conference – Hess Corp – slide 9
    Focused, High Return Portfolio Balance between cash engines and growth engines Cash Engines1 Growth Engines 2019 to 2025 Lower Growth Higher Growth 2019 to 2025 8 billion free cash flow 9 billion free cash flow 10% of Capex 75% of…
  10. Scotia Howard Weil Conference – Hess Corp – slide 10
    Guyana: Stabroek Block 15% of Conventional Oil Discovered Globally Since 2015 Hess 30% interest; Water Depth: 5,500 - 11,000 ft Drilling TD: 17,000 - 23,000 ft (Operator: ) Roraima 6.6 million acres (equal to 1,150 GoM Kaieteur…
  11. Scotia Howard Weil Conference – Hess Corp – slide 11
    Guyana: Stabroek Block World class investment opportunity Among industrys largest offshore oil discoveries in the past decade - 5.5 BBOE gross discovered recoverable resource - Multi billion barrels of unrisked exploration…
  12. Scotia Howard Weil Conference – Hess Corp – slide 12
    Guyana: Stabroek Block Low development costs and outstanding financial returns Guyana Delaware Basin Liza Illustrative Phase 1 50,000 Net Acre Liza Phase 1 - Cumulative Cash Flow Development1 Development2 Peak Production 120,000…
  13. Scotia Howard Weil Conference – Hess Corp – slide 13
    RS 20 40 60 80 - 100 TMS Stella Kraken Mariner Western Isles Barnett Arkoma Woodford Granite Wash Fayetteville Uinta Basin Mississippi Lime Libra Big Foot Utica 120Energy Group; /bbl WTI Upper Devonian…
  14. Scotia Howard Weil Conference – Hess Corp – slide 14
    Guyana: Stabroek Block Guyana resources 5.5 BBOE and growing rapidly Water Depth: 5,500 - 11,000 ft Discovered Recoverable Resource Guyana Production Capacity Drilling TD: 17,000 - 23,000 ft Cumulative BBOE1 Gross Production Capacity;…
  15. Scotia Howard Weil Conference – Hess Corp – slide 15
    Gulf of Mexico Significant free cash flow generation, high returns with upside Conger T-Bells Sustain net production 65 MBOED through 2025 (Hess) (Hess) Stampede Strategic/ through infills & tiebacks Llano (Hess) Portfolio (Shell)…
  16. Scotia Howard Weil Conference – Hess Corp – slide 16
    South East Asia: JDA and North Malay Basin Stable long term free cash flow generation JDA Established operator, strong partnership with PETRONAS Strategic/ Thailand Portfolio Premium gas market Context Generates 2 billion FCF 2019…
  17. Scotia Howard Weil Conference – Hess Corp – slide 17
    Bakken Leading acreage position in the core of the play Leading acreage position in core Middle Divide Bakken and Three Forks Burke Strategic/ Focus on efficiencies via Lean principles to Tioga Rail Terminal Portfolio Kenmare…
  18. Scotia Howard Weil Conference – Hess Corp – slide 18
    Competitively Advantaged Position Hess positioned to capture significant value uplift in the Bakken Top Tier Established track record of asset optimization, cost reductions and value creation Operator Operational excellence & lean…
  19. Scotia Howard Weil Conference – Hess Corp – slide 19
    Bakken Competitively advantaged position in premium tight oil play Improving Type Curves Production Increases to Premier Bakken Position in the Core 200 MBOED by 2021 Type Curves Bakken Production Average IP180 Cum. Oil Curve; MBO;…
  20. Scotia Howard Weil Conference – Hess Corp – slide 20
    Bakken 50% average IRR over the next 60+ rig years of drilling inventory Significant Inventory of High Return Locations Focused 2019 Bakken Development Well Plan Number of Locations with IRRs at 15% or Above Gross number of economic…
  21. Scotia Howard Weil Conference – Hess Corp – slide 21
    Bakken Competitively advantaged infrastructure supports Bakken development Hess Bakken Footprint Strategic infrastructure supporting Hess Bakken development Export flexibility provides access to highest value markets 70% volume…
  22. Scotia Howard Weil Conference – Hess Corp – slide 22
    Hess Financial Priorities Financial strategy integral to delivering compelling shareholder value Strategic Priorities Financial Priorities Disciplined Capital Allocation Strategy 75% of capital to high return Guyana & Bakken Divested…
  23. Scotia Howard Weil Conference – Hess Corp – slide 23
    Financial Strength and Flexibility Strong liquidity, balance sheet and flexibility 3.8 B of asset monetizations since 2017 Net Debt / Capitalization1 94% Robust 7.0 B of liquidity Liquidity - 2.6 B cash at December 31, 2018…
  24. Scotia Howard Weil Conference – Hess Corp – slide 24
    Hess Performance Dashboard High return projects drives superior shareholder returns & cash flow Debt-adjusted Production Growth1 EBITDAX1 CAGR from 2017 pro forma billion 20% CAGR 25% 19% 15% 12% 1.6 NA 0 2017 2019 2021 2023…
  25. Scotia Howard Weil Conference – Hess Corp – slide 25
    Transformative Inflection Point Return on capital increases substantially CROCE by over 3.5x to 30% by 2025 Industry leading cash flow growth through 2025 with low execution risk Portfolio breakeven decreases…
  26. Scotia Howard Weil Conference – Hess Corp – slide 26
  27. Scotia Howard Weil Conference – Hess Corp – slide 27
    Appendix: Reconciliations of Non-GAAP Measures Net Debt to Capitalization Ratio December 31, 2018 (in millions) Hess Consolidated Total debt 6,672 Less: cash and cash equivalents 2,694 Net debt 3,978 Total debt 6,672 Add:…
  28. Scotia Howard Weil Conference – Hess Corp – slide 28
    Appendix: Reconciliations of Non-GAAP Measures Cash Return on Capital Employed Ratio December 31, 2017 (in millions) Hess Consolidated Net cash provided by (used in) operating activities 945 Add: Changes in operating assets and…
  29. Scotia Howard Weil Conference – Hess Corp – slide 29
    Appendix: Reconciliations of Non-GAAP Measures Debt/EBITDAX December 31, 2017 (in millions) Hess Consolidated Net income (loss) (3,941) Add: Provision (benefit) for income taxes (1,837) Add: Impairment 4,203 Add: Depreciation,…
  30. Scotia Howard Weil Conference – Hess Corp – slide 30

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