Hess 2014 Annual Report Download - page 131

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DeGolyer and MacNaughton
The Hess net proved reserves attributable to these properties, as of December 31, 2014, and which represent approximately
80 percent of total Hess net reserves on a net equivalent barrel basis, are as follows, expressed in millions of barrels (MMbbl), billions
of cubic feet (Bcf), and millions of barrels of oil equivalent (MMboe):
Estimated b
y
Hess
Net Proved Reserves as of December 31, 2014
Oil and
Condensate
(
MMbbl
)
Natural Gas
Liquids
(
MMbbl
)
Natural Gas
(
Bcf
)
Oil
Equivalent
(
MMboe
)
United States 385 61 252 488
N
orwa
y
230 26 180 286
Denmar
k
35 0 40 41
Africa 168 0 146 192
Asia 6 0 825 144
Total 824 87 1,443 1,151
Note: Gas is converted to oil equivalent using an energy equivalent factor of 6,000 cubic feet of gas per 1 barrel of oil equivalent.
Opinion
The assumptions, data, methods, and procedures used by DeGolyer and MacNaughton to conduct the reserves audit are
appropriate for the purposes of this report.
In our opinion, the information relating to estimated proved reserves of oil, condensate, natural gas liquids, and gas contained
in this report has been prepared in accordance with Paragraphs 932-235-50-4, 932-235-50-6, 932-235-50-7, and 932-235-50-9 of the
Accounting Standards Update 932-235-50, Extractive Industries – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and
Disclosures (January 2010) of the Financial Accounting Standards Board and Rules 4–10(a) (1)–(32) of Regulation S–X and Rules
302(b), 1201, 1202(a) (1), (2), (3), (4), (8), and 1203(a) of Regulation S–K of the Securities and Exchange Commission; provided,
however, that estimates of proved developed and proved undeveloped reserves are not presented at the beginning of the year.
To the extent the above-enumerated rules, regulations, and statements require determinations of an accounting or legal
nature, we, as engineers, are necessarily unable to express an opinion as to whether the above-described information is in accordance
therewith or sufficient therefor.
In comparing the detailed net proved reserves estimates by field prepared by us and by Hess, we have found differences, both
positive and negative, resulting in an aggregate difference of less than 1 percent when compared on the basis of net equivalent barrels.
It is our opinion that the total net proved reserves estimates prepared by Hess as of December 31, 2014, on the properties reviewed by
us and referred to in the table above, when compared on the basis of net equivalent barrels, do not differ materially from those
prepared by us.
Methodology and Procedures
Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principals and
techniques that are in accordance with practices generally recognized by the petroleum industry as presented in the publication of the
Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information
(Revision as of February 19, 2007).” The method or combination of methods used in the analysis of each reservoir was tempered by
experience with similar reservoirs, stage of development, quality and completeness of basic data, and production history.
When applicable, the volumetric method was used to estimate the original oil in place (OOIP) and the original gas in place
(OGIP). Structure and isopach maps were constructed to estimate reservoir volume. Electrical logs, radioactivity logs, core analyses,
and other available data were used to prepare these maps as well as to estimate representative values for porosity and water saturation.
When adequate data were available and when circumstances justified, material balance and other engineering methods were used to
estimate OOIP or OGIP.
Estimates of ultimate recovery were obtained after applying recovery factors to OOIP or OGIP. These recovery factors were
based on consideration of the type of energy inherent in the reservoirs, analyses of the fluid properties, the structural positions of the