Hess 2011 Annual Report Download - page 51

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2011 2010 2009
Natural gas — per mcf
UnitedStates ............................................... $3.39 $3.70 $3.36
Europe .................................................... 8.79 6.23 5.15
Asiaandother............................................... 6.02 5.93 5.06
Worldwide ............................................... 5.96 5.63 4.85
In October 2008, the Corporation closed Brent crude oil hedges covering 24,000 barrels per day from 2009
through 2012 by entering into offsetting contracts with the same counterparty. The deferred after-tax losses as of
the date the hedge positions were closed are recorded in earnings as the contracts mature. Crude oil hedges
reduced E&P earnings by $327 million ($517 million before income taxes) in 2011, $338 million ($533 million
before income taxes) in 2010 and $337 million ($533 million before income taxes) in 2009. The remaining
realized after-tax losses from the closed hedge positions will be approximately $325 million in 2012. The
Corporation also entered into Brent crude oil hedges using fixed-price swap contracts to hedge 120,000 boepd of
crude oil sales volumes for the full year of 2012 at an average price of $107.70 per barrel.
Production and Sales Volumes: The Corporation’s crude oil and natural gas production was 370,000
boepd in 2011 compared with 418,000 boepd in 2010 and 408,000 boepd in 2009. The principal reasons for the
reduction are described below. Approximately 72% in 2011, 73% in 2010 and 72% in 2009 of the Corporation’s
production was from crude oil and natural gas liquids. The Corporation currently estimates that its 2012
production will average between 370,000 and 390,000 boepd, excluding the impact of asset sales and any Libyan
production.
The Corporation’s net daily worldwide production was as follows for the years ended December 31:
2011 2010 2009
(In thousands)
Crude oil — barrels per day
UnitedStates ............................................... 81 75 60
Europe .................................................... 89 88 83
Africa ..................................................... 66 113 120
Asia....................................................... 13 13 16
Total .................................................... 249 289 279
Natural gas liquids — barrels per day
UnitedStates ............................................... 13 14 11
Europe .................................................... 33 3
Asia....................................................... 11 —
Total .................................................... 17 18 14
Natural gas — mcf per day
UnitedStates ............................................... 100 108 93
Europe .................................................... 81 134 151
Asiaandother............................................... 442 427 446
Total .................................................... 623 669 690
Barrelsofoilequivalent—perday* ............................. 370 418 408
* Reflects natural gas production converted on the basis of relative energy content (six mcf equals one barrel). Barrel of oil equivalence does
not necessarily result in price equivalence as the equivalent price of natural gas on a barrel of oil equivalent basis has been substantially
lower than the corresponding price for crude oil over the recent past. See the average selling prices in the table above.
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