Hess 2000 Annual Report Download - page 52

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50
The standardized measure of discounted future net cash
flows relating to proved oil and gas reserves required to be
disclosed by FAS No. 69 is based on assumptions and
judgements. As a result, the future net cash flow estimates
are highly subjective and could be materially different if
other assumptions were used. Therefore, caution should
be exercised in the use of the data presented below.
Future net cash flows are calculated by applying year-
end oil and gas selling prices (adjusted for price changes
provided by contractual arrangements, including hedges)
to estimated future production of proved oil and gas
reserves, less estimated future development and produc-
tion costs and future income tax expenses. Future net cash
flows are discounted at the prescribed rate of 10%. No
recognition is given in the discounted future net cash flow
estimates to depreciation, depletion, amortization and
lease impairment, exploration expenses, interest expense,
general and administrative expenses and changes in
future prices and costs. The selling prices of crude oil
and natural gas have increased significantly and are
highly volatile. The year-end prices which are required to
be used for the discounted future net cash flows may not
be representative of future selling prices.
Standardized Measure of Discounted Future Net Cash Flows
Relating to Proved Oil and Gas Reserves
United Africa, Asia
At December 31 (Millions of dollars) Total States Europe and other
2000
Future revenues $25,986 $9,290 $12,537 $4,159
Less:
Future development and production costs 8,672 1,551 4,808 2,313
Future income tax expenses 6,750 2,565 3,597 588
15,422 4,116 8,405 2,901
Future net cash flows 10,564 5,174 4,132 1,258
Less: Discount at 10% annual rate 3,669 1,923 1,132 614
Standardized measure of discounted future net cash flows $ 6,895 $3,251 $ 3,000 $ 644
Share of equity investee’s standardized measure $ 305 $ — $ 44 $ 261
1999
Future revenues $ 19,858 $ 5,133 $ 12,810 $ 1,915
Less:
Future development and production costs 6,500 1,396 4,484 620
Future income tax expenses 5,457 1,167 3,753 537
11,957 2,563 8,237 1,157
Future net cash flows 7,901 2,570 4,573 758
Less: Discount at 10% annual rate 2,814 1,027 1,441 346
Standardized measure of discounted future net cash flows $ 5,087 $ 1,543 $ 3,132 $ 412
Share of equity investee’s standardized measure $ 237 $ — $ 71 $ 166
1998
Future revenues $ 10,826 $ 2,866 $ 6,457 $ 1,503
Less:
Future development and production costs 6,412 1,479 4,183 750
Future income tax expenses 1,411 374 795 242
7,823 1,853 4,978 992
Future net cash flows 3,003 1,013 1,479 511
Less: Discount at 10% annual rate 980 403 326 251
Standardized measure of discounted future net cash flows $ 2,023 $ 610 $ 1,153 $ 260