Hess 2011 Annual Report Download - page 34

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are additional natural gas supply commitments on producing fields in Thailand and Indonesia which currently total
approximately 45 million mcf per year under contracts expiring in years 2021 through 2029. The Corporation also
has a commitment to supply approximately 15 million mcf of natural gas per year in the Bakken under a sales
contract expiring in 2013. The Corporation also has NGL contracts relating to the Bakken, which commence in
2013. The minimum contract quantity under these contracts, which expire in 2023, is approximately 9.6 million
barrels per year. The estimated total volume of production subject to sales commitments under all these contracts is
approximately 2,422 million mcf of natural gas and 96 million barrels of NGL. The Corporation has not
experienced any significant constraints in satisfying the committed quantities required by its sales commitments and
it anticipates being able to meet future requirements from available proved and probable reserves.
Natural gas is marketed by the M&R segment on a spot basis and under contracts for varying periods of time
to local distribution companies, and commercial, industrial and other purchasers. These natural gas marketing
activities are primarily conducted in the eastern portion of the United States, where the principal source of supply is
purchased natural gas, not the Corporation’s production from the E&P segment. The Corporation has not
experienced any significant constraints in obtaining the required supply of purchased natural gas.
Average selling prices and average production costs
2011 2010 2009
Average selling prices (a)
Crude oil (per barrel)
UnitedStates ....................................... $ 98.56 $75.02 $60.67
Europe(b).......................................... 80.18 58.11 47.02
Africa ............................................. 88.46 65.02 48.91
Asia............................................... 111.71 79.23 63.01
Worldwide ....................................... 89.99 66.20 51.62
Natural gas liquids (per barrel)
UnitedStates ....................................... $ 58.59 $47.92 $36.57
Europe(b).......................................... 75.49 59.23 43.23
Asia............................................... 72.29 63.50 46.48
Worldwide ....................................... 62.72 50.49 38.47
Natural gas (per mcf)
UnitedStates ....................................... $ 3.39 $ 3.70 $ 3.36
Europe(b).......................................... 8.79 6.23 5.15
Asiaandother....................................... 6.02 5.93 5.06
Worldwide ....................................... 5.96 5.63 4.85
Average production (lifting) costs per barrel of oil equivalent
produced (c)
UnitedStates ....................................... $ 16.30 $12.61 $13.72
Europe(b).......................................... 25.13 17.55 15.77
Africa ............................................. 15.95 11.00 10.93
Asiaandother....................................... 10.62 8.16 7.65
Worldwide ....................................... 17.40 12.61 12.12
(a) Includes inter-company transfers valued at approximate market prices and the effect of the Corporation’s hedging activities.
(b) The average selling prices in Norway for 2011 were $112.38 per barrel for crude oil, $62.07 per barrel for natural gas liquids and
$9.77 per mcf for natural gas. The average production (lifting) cost in Norway in 2011 was $31.09 per barrel of oil equivalent produced.
The average selling prices in Norway for 2010 were $79.47 per barrel for crude oil, $52.26 per barrel for natural gas liquids and
$7.32 per mcf for natural gas. The average production (lifting) cost in Norway in 2010 was $18.33 per barrel of oil equivalent produced.
(c) Production (lifting) costs consist of amounts incurred to operate and maintain the Corporation’s producing oil and gas wells, related
equipment and facilities, transportation costs and production and severance taxes. The average production costs per barrel of oil
equivalent reflect the crude oil equivalent of natural gas production converted on the basis of relative energy content (six mcf equals one
barrel).
The table above does not include costs of finding and developing proved oil and gas reserves, or the costs of
related general and administrative expenses, interest expense and income taxes.
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