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of FAS 160 effective January 1, 2009 and estimates that the impact of adoption will result in a decrease to other long
term liabilities and an increase to stockholders’ equity of approximately $85 million.
2. Acquisitions and Divestitures
2008: In the third quarter of 2008, the Corporation acquired the remaining 22.5% interest in its Gabonese
subsidiary for $285 million, of which $210 million was allocated to proved properties. The Corporation expanded
its energy marketing business by acquiring fuel oil, natural gas, and electricity customer accounts, and a terminal
and related assets, for an aggregate of approximately $100 million.
2007: In the first quarter of 2007, the Corporation completed the acquisition of a 28% interest in the Genghis
Khan oil and gas development located in the deepwater Gulf of Mexico on Green Canyon Blocks 652 and 608 for
$371 million, of which $342 million was allocated to proved and unproved properties and the remainder to wells
and equipment. This transaction was accounted for as an asset acquisition. Genghis Khan has been unitized with the
Shenzi development.
During the second quarter of 2007, the Corporation completed the sale of its interests in the Scott and Telford
fields located in the United Kingdom for $93 million and recorded a gain of $21 million ($15 million after income
taxes). At the time of sale, these two fields were producing at a combined net rate of 6,500 barrels of oil per day.
3. Inventories
Inventories at December 31 are as follows:
2008 2007
(Millions of dollars)
Crude oil and other charge stocks ................................... $ 383 $ 338
Refined products and natural gas .................................... 988 1,577
Less: LIFO adjustment ........................................... (500) (1,029)
871 886
Merchandise, materials and supplies.................................. 437 364
Total ....................................................... $1,308 $ 1,250
The percentage of LIFO inventory to total crude oil, refined products and natural gas inventories was 60% and
69% at December 31, 2008 and 2007, respectively. During 2007 the Corporation reduced LIFO inventories, which
are carried at lower costs than current inventory costs. The effect of the LIFO inventory liquidations was to decrease
cost of products sold by approximately $38 million ($24 million after income taxes).
54
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)