Hess Corporation GOLDMAN SACHS ENERGY CONFERENCE January 7, 2020
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…
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…
Sustainability Focus Across Our Company Values drive value Safety Climate Change & Environment Social Responsibility Reduced workforce recordable Have reduced absolute Scope 1 Guided by commitments to incident rate by 23% and…
Global Energy Demand Oil & gas essential to meeting global energy demand Primary Energy Demand Outlook (IEA) BTOE Energy demand led by 2018 2040 Outlook by IEA Scenario1 population and GDP growth Current Stated Sustainable increases…
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…
Leverage to High Value Brent Oil Leading liquids weighted resource base Leading Liquids Weighting Among Peers Liquids % of Commercial Resources1 80% 40% 0% HES Peer 1 2 3 4 5 6 7 8 9 10 11 Pricing Exposure % of production…
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%…
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…
Portfolio Delivers Market Leading Cash Flow Growth 24% cash flow CAGR to 2021 leads peers and key sectors of S&P 500 CFFO CAGR1 Peers CFFO CAGR1 2018 to 2021 30% 2018 to 2021 20% 10% Average 3% 24% 0% -10% 17% -20% Peers HES…
Guyana: Stabroek Block 15% of Conventional Oil Discovered Globally Since 2015 Hess 30% interest; Stabroek Kaieteur Water Depth: 5,500 - 11,000 ft ExxonMobil 45% (Op) (Operator: ) Hess 30% 2 Drilling TD: 17,000 - 23,000 ft Nexen…
Guyana: Stabroek Block World class investment opportunity Among industrys largest offshore oil discoveries in the past decade - 6.0 BBOE gross discovered recoverable resource - Multi billion barrels of unrisked exploration…
Gulf of Mexico Significant free cash flow generation, high returns with upside Sustain net production 65 MBOED through 2025 Conger T-Bells Strategic/ (Hess) (Hess) through infills & tiebacks Stampede Portfolio Llano (Hess) Context…
South East Asia: JDA and North Malay Basin Stable long term free cash flow generation Established operator, strong partnership with JDA Strategic/ PETRONAS Thailand Portfolio Context Phased infill development drilling sustains net…
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…
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;…
Bakken 15 years drilling inventory that generates average IRR of 50% 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…
Bakken Competitively advantaged infrastructure supports Bakken development Strategic infrastructure supporting Hess development Export flexibility provides access to highest value markets 70% volume currently linked to Brent based…
Financial Strength and Priorities Strong cash position, hedges & industry leading cash flow growth 5.7 B of liquidity Near Term Debt Maturities billions - 1.9 B cash at September 30, 2019 1.0 Robust Liquidity - 3.5 B undrawn…
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 23% 19% 15% 13% 1.6 NA 0 2017 2019 2021…
Transformative Inflection Point Industry leading cash flow growth through 2025 with low execution risk Return on capital increases substantially CROCE by over 3.5x to 30% by 2025 Portfolio breakeven decreases…
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…
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,…
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