Hess 2014 Annual Report Download - page 47

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Corporation of $951 million. Samara-Nafta was producing at an aggregate net rate of approximately 50,000 boepd at the
time of sale and had a total of 82 million boe of proved reserves at December 31, 2012. In the first quarter of 2013, the
Corporation completed the sale of its interests in the Beryl fields in the UK North Sea for cash proceeds of $442 million,
resulting in a pre-tax gain of $328 million ($323 million after income taxes) and the sale of its interests in the
Azeri-Chirag-Guneshli (ACG) fields, offshore Azerbaijan in the Caspian Sea, for cash proceeds of $884 million, resulting in
a pre-tax gain of $360 million ($360 million after income taxes). These assets were producing at an aggregate net rate of
approximately 16,000 boepd at the time of sale and had a total of 38 million boe of proved reserves at December 31, 2012.
In December 2013, the Corporation recorded dry hole costs of $260 million ($163 million after income taxes) associated with
Area 54, offshore Libya due to continued civil unrest in the country. In addition, during 2013, the Corporation recorded pre-
tax impairment charges totaling $327 million ($210 million after income taxes). These impairment charges consisted of
$289 million ($187 million after income taxes) related to Pangkah to adjust its carrying value to its fair value at December 31,
2013 and $38 million ($23 million after income taxes) to write-off the Corporation’s leasehold acreage in the Marcellus,
onshore U.S. In 2013, the Corporation recorded net pre-tax charges of $129 million ($117 million after income taxes) for
severance, non-cash charges associated with the cessation of use of certain leased office space and other exit costs, resulting
from its planned divestitures and transformation into a more focused pure play E&P company. In December 2013, Denmark
enacted a new hydrocarbon income tax law that resulted in a combination of changes to tax rates, revisions to the amount of
uplift allowed on capital expenditures and special transition rules. As a consequence of the tax law change, the Corporation
recorded a deferred tax asset of $674 million. In addition, during 2013, the Corporation recorded a non-cash income tax
charge of $28 million as a result of a planned asset divestiture and a charge of $22 million relating to the repatriation of
foreign earnings.
2012: The Corporation completed the sale of its interests in the Schiehallion Field (Hess 16%) and the Bittern Field
(Hess 28%), which are both located in the UK North Sea, as well as the Snohvit Field (Hess 3%), offshore Norway, for total
cash proceeds of $843 million. These transactions resulted in pre-tax gains totaling $584 million ($557 million after income
taxes). These assets were producing at an aggregate net rate of approximately 15,000 boepd at the time of sale and had a total
of 83 million boe of proved reserves at December 31, 2011. The Corporation recorded asset impairment charges totaling
$582 million ($344 million after income taxes). These impairment charges consisted of $374 million ($228 million after
income taxes) associated with the divestiture of assets in the Eagle Ford Shale in Texas and $208 million ($116 million after
income taxes) related to non-producing properties in the UK North Sea. In 2012, the Corporation decided to cease further
development and appraisal activities in Peru. As a result, the Corporation recorded exploration expenses totaling $86 million
($56 million after income taxes) to write-off its exploration assets in the country. In July 2012, the government of the UK
changed the supplementary income tax rate applicable to deductions for dismantlement expenditures to 20% from 32%. As a
result, the Corporation recorded a one-time charge in the third quarter of 2012 of $115 million for deferred taxes related to
asset retirement obligations in the UK. In the fourth quarter of 2012, the Corporation recorded an income tax charge of
$86 million for a disputed application of an international tax treaty.