Hess 2014 Annual Report Download - page 31

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including national oil companies, are larger and have substantially greater resources. We are also in competition with
producers of other forms of energy. Increased competition for worldwide oil and gas assets has significantly increased the
cost of acquiring oil and gas assets. In addition, competition for drilling services, technical expertise and equipment may
affect the availability of technical personnel and drilling rigs, resulting in increased capital and operating costs.
Catastrophic events, whether naturally occurring or man-made, may materially affect our operations and financial
conditions. Our oil and gas operations are subject to unforeseen occurrences which have affected us from time to time and
which may damage or destroy assets, interrupt operations and have other significant adverse effects. Examples of
catastrophic risks include hurricanes, fires, explosions, blowouts, such as the third party accident at the Macondo prospect,
pipeline interruptions and ruptures, severe weather, geological events, labor disputes or cyber-attacks. Although we maintain
insurance coverage against property and casualty losses, there can be no assurance that such insurance will adequately protect
the Corporation against liability from all potential consequences and damages. Moreover, some forms of insurance may be
unavailable in the future or be available only on terms that are deemed economically unacceptable.
Significant time delays between the estimated and actual occurrence of critical events associated with development
projects may result in material negative economic consequences. The Corporation is involved in several large
development projects and the completion of those projects may be delayed beyond what was originally anticipated. Such
examples include, but are not limited to, delays in receiving necessary approvals from project members or regulatory
agencies, timely access to necessary equipment, availability of necessary personnel and unfavorable weather conditions. This
may lead to delays and differences between estimated and actual timing of critical events. These delays could impact
information detailed in forward-looking statements, and may have material negative economic consequences.
Departures of key members from the Corporation’s senior management team, and/or difficulty in recruiting and
retaining adequate numbers of experienced technical personnel, could negatively impact the Corporation’s ability to
deliver its strategic goals. The derivation and monitoring of successful strategies and related policies may be negatively
impacted by the departure of key members of senior management. Moreover, an inability to recruit and retain adequate
numbers of experienced technical and professional personnel in the necessary locations may prohibit the Corporation from
executing its strategy in full or, in part, with a commensurate impact on shareholder value.
The Corporation is dependent on oilfield service companies for items including drilling rigs, equipment, supplies
and skilled labor. An inability or significant delay in securing these services, or a high cost thereof, may result in
material negative economic consequences. The availability and cost of drilling rigs, equipment, supplies and skilled labor
will fluctuate over time given the cyclical nature of the Exploration and Production industry. As a result, the Corporation
may encounter difficulties in obtaining required services or could face an increase in cost. These consequences may impact
the ability of the Corporation to run its operations and to deliver projects on time with the potential for material negative
economic consequences.
Cyber-attacks targeting computer, telecommunications systems, and infrastructure used by the oil and gas
industry may materially impact our business and operations. Computers and telecommunication systems are used to
conduct our exploration, development and production activities and have become an integral part of our business. We use
these systems to analyze and store financial and operating data and to communicate within our company and with outside
business partners. Cyber-attacks could compromise our computer and telecommunications systems and result in disruptions
to our business operations or the loss of our data and proprietary information. In addition, computers control oil and gas
production, processing equipment, and distribution systems globally and are necessary to deliver our production to market. A
cyber-attack against these operating systems, or the networks and infrastructure on which they rely, could damage critical
production, distribution and/or storage assets, delay or prevent delivery to markets, and make it difficult or impossible to
accurately account for production and settle transactions. As a result, a cyber-attack could have a material adverse impact on
our cash flows and results of operations. We routinely experience attempts by external parties to penetrate and attack our
networks and systems. Although such attempts to date have not resulted in any material breaches, disruptions, or loss of
business critical information, our systems and procedures for protecting against such attacks and mitigating such risks may
prove to be insufficient in the future and such attacks could have an adverse impact on our business and operations.