Hess 2014 Annual Report Download - page 51

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Investing Activities: The following table summarizes the Corporation’s capital expenditures:
2014 2013 2012
(In millions)
Exploration and Production ...............................................................................................
Exploration ....................................................................................................................$ 431 $ 602 $ 619
Production and development .......................................................................................... 4,702 5,051 6,790
Acquisitions (including leaseholds) ............................................................................... 88 56 267
Total Exploration and Production ..................................................................................... 5,221 5,709 7,676
Corporate ......................................................................................................................... 53 58 6
Total capital expenditures - continuing operations ........................................................ 5,274 5,767 7,682
Downstream businesses - discontinued operations ............................................................ 431 106 113
Total capital expenditures ........................................................................................... $ 5,705 $ 5,873 $ 7,795
The decrease in capital expenditures in 2014, as compared with 2013, is largely due to the ongoing reduction in capital
expenditures in the Bakken, reflecting lower well costs and completion of the Tioga gas plant expansion project. The
decrease in capital expenditures in 2013 as compared to 2012 was mainly due to reduced capital expenditures in the Bakken,
resulting from fewer drilling rigs being operated in the field as well as lower costs per well. In addition, completion of the
redevelopment project at the Valhall Field in January 2013 as well as asset sales reduced 2013 capital expenditures.
Total proceeds from the sale of assets related to continuing operations amounted to approximately $3.0 billion in 2014,
$4.5 billion in 2013 and $0.8 billion in 2012. In 2014, the Corporation completed asset sales of its dry gas acreage in the
Utica shale play, its assets in Thailand, the Pangkah Field, offshore Indonesia, and its interests in two power plant joint
ventures. Completed sales in 2013 included the Corporation’s interests in the Beryl, ACG, Eagle Ford and Natuna A fields,
and its Russian subsidiary, Samara-Nafta.
In 2014, net cash provided by investing activities from discontinued operations included proceeds of $2.8 billion from the
sale of the retail business. In addition, the Corporation acquired in January 2014, its partners’ 56% interest in WilcoHess, a
retail gasoline joint venture, for approximately $290 million. In June 2014, the Corporation incurred capital expenditures of
$105 million related to the acquisition of previously leased retail gasoline stations. Both of these transactions were
undertaken in connection with the Corporation’s divestiture of its retail business. Net cash provided by investing activities
related to discontinued operations for 2013 includes proceeds of approximately $2.2 billion from the sales of the
Corporation’s energy marketing operations and its U.S. East Coast terminal network, St. Lucia terminal and related
businesses.
Financing Activities: During 2014, the Corporation issued $600 million ($598 million net of discount) of unsecured,
fixed rate notes and repaid $590 million of debt, including $250 million of unsecured, fixed rate notes, $74 million assumed
in the acquisition of WilcoHess, and $249 million for the payment of various lease obligations primarily related to the
retirement of the Corporation’s retail gasoline station leases. In 2013, the Corporation repaid $2,348 million, net under
available credit facilities and repaid $136 million of other debt. The net repayments under the credit facilities consisted of
$990 million on the Corporation’s short-term credit facilities, $758 million on its syndicated revolving credit facility and
$600 million on its asset backed credit facility. During 2012, the Corporation borrowed a net of $1,845 million from
available credit facilities, which consisted of borrowings of $758 million from its syndicated revolving credit facility,
$890 million from its short-term credit facilities and $250 million from its asset-backed credit facility, partially offset by net
repayments of other debt of $53 million.
The Corporation repurchased Hess common stock of approximately $3.7 billion in 2014 and approximately $1.5 billion in
2013 under its $6.5 billion board authorized stock repurchase plan. Total common stock dividends paid were $303 million in
2014, $235 million in 2013 and $171 million in 2012. The Corporation received net proceeds from the exercise of stock
options, including related income tax benefits of $182 million, $128 million and $11 million in 2014, 2013 and 2012,
respectively.