Hess 2008 Annual Report Download - page 95

Download and view the complete annual report

Please find page 95 of the 2008 Hess annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

United
States Europe Africa
Asia and
Other Total
United
States Europe
Africa,
Asia and
Other Total
Crude Oil, Condensate and Natural Gas Liquids Natural Gas
(Millions of barrels) (Millions of mcf)
Net Proved Developed Reserves
At January 1, 2006 . . . . . . . . . . . . . . . 108 233 67 13 421 251 559 496 1,306
At December 31, 2006 . . . . . . . . . . . . 90 223 194 19 526 195 517 585 1,297
At December 31, 2007 . . . . . . . . . . . . 101 201 201 15 518 199 519 654 1,372
At December 31, 2008 . . . . . . . . . . . . 119 192 237 23 571 202 502 727 1,431
(a) Includes the impact of changes in selling prices on production sharing contracts with cost recovery provisions and stipulated rates of return.
In 2008, revisions included increases of approximately 59 million barrels of crude oil and 104 million mcf of natural gas, relating to lower
selling prices. In 2007 revisions included reductions of approximately 29 million barrels of crude oil and 104 million mcf of natural gas,
relating to higher selling prices. In 2006 this amount was immaterial for both oil and natural gas
(b) Includes 28% of crude oil reserves and 58% of natural gas reserves held under production sharing contracts. These reserves are located
outside of the United States and are subject to different political and economic risks.
(c) Includes 16 million barrels in 2008, 20 million barrels in 2007 and 23 million barrels in 2006 of crude oil reserves relating to minority
interest owners of corporate joint ventures.
(d) Excludes approximately 400 million mcf of carbon dioxide gas for sale or use in company operations.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
Future net cash flows are calculated by applying year-end oil and gas selling prices (adjusted for price changes
provided by contractual arrangements) to estimated future production of proved oil and gas reserves, less estimated
future development and production costs, which are based on year-end costs and existing economic assumptions.
Future income tax expenses are computed by applying the appropriate year-end statutory tax rates to the pre-tax net
cash flows relating to the Corporation’s proved oil and gas reserves. Future net cash flows are discounted at the
prescribed rate of 10%. The discounted future net cash flow estimates required by FAS 69 do not include
exploration expenses, interest expense or corporate general and administrative expenses. The selling prices of crude
oil and natural gas are highly volatile. The year-end prices, which are required to be used for the discounted future
net cash flows, do not include the effects of hedges and may not be representative of future selling prices. The future
net cash flow estimates could be materially different if other assumptions were used.
At December 31 Total
United
States Europe Africa
Asia and
Other
(Millions of dollars)
2008
Future revenues ........................... $46,846 $ 9,801 $15,757 $12,332 $ 8,956
Less:
Future production costs ................... 15,884 3,422 5,998 3,763 2,701
Future development costs .................. 10,649 1,983 4,014 1,781 2,871
Future income tax expenses ................ 9,299 1,467 2,741 4,440 651
35,832 6,872 12,753 9,984 6,223
Future net cash flows ....................... 11,014 2,929 3,004 2,348 2,733
Less: discount at 10% annual rate .............. 4,050 1,602 984 493 971
Standardized measure of discounted future net cash
flows................................. $ 6,964 $ 1,327 $ 2,020 $ 1,855 $ 1,762
79