Commission File Number 1-1204

(Exact Name of Registrant as Specified in Its Charter)

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

1185 AVENUE OF THE AMERICAS, NEW YORK, ~~N.Y.~~

(Address of Principal Executive Offices)

(Registrant’s Telephone Number, Including Area Code is (212) 997-8500)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock	HES	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ý No ☐¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ý No ☐¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ý

At March 31, ~~2020,~~2021, there were ~~307,158,340~~308,436,780 shares of Common Stock outstanding.

Unless the context indicates otherwise, references to “Hess”, the “Corporation”, “Registrant”, “we”, “us”, “our” and “its” refer to the consolidated business operations of Hess Corporation and its subsidiaries.

PART I - FINANCIAL INFORMATION

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (UNAUDITED)

See accompanying Notes to Consolidated Financial Statements.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED INCOME (UNAUDITED)

See accompanying Notes to Consolidated Financial Statements.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)

See accompanying Notes to Consolidated Financial Statements.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS (UNAUDITED)

See accompanying Notes to Consolidated Financial Statements.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED EQUITY (UNAUDITED)

See accompanying Notes to Consolidated Financial Statements.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The financial statements included in this report reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of our consolidated financial position at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the consolidated results of operations for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, and consolidated cash flows for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year.

The financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by generally accepted accounting principles (GAAP) in the United States have been condensed or omitted from these interim financial statements. These statements, therefore, should be read in conjunction with the consolidated financial statements and related notes included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

In2020.

Inventories consisted of the following:


	March 31, 2021		December 31, 2020

	(In millions)
Crude oil and natural gas liquids	$	46	$	226
Materials and supplies	173		152
Total Inventories	$	219	$	378

At December 31, 2020, crude oil inventories included $164 million associated with the cost of 4.2 million barrels of crude oil transported and stored on 2 chartered very large crude carriers (VLCCs) for sale in Asian markets. The 2 VLCC cargos were sold in the first quarter of ~~2020, we adopted~~ 2021.

~~Accounting Standards Update~~ ~~(ASU) 2016-13,~~ ~~Financial Instruments – Credit Losses.~~ This ASU makes changes to the impairment model for trade receivables, net investments in leases, debt securities, loans and certain other instruments. The standard requires the use of a forward-looking "expected loss" model compared with the prior "incurred loss" model. We calculate expected credit losses for our receivables using the probability of default and the expected loss given default. Historical data, current market conditions, and forecasts of future economic conditions are used to determine the probability of default and the expected loss given default. The adoption of this ASU did not have a material impact to our financial statements.

~~2. Impairment~~

~~Oil and Gas Properties:~~

~~As a result of the significant decline in crude oil prices due to the global economic slowdown from the~~ ~~coronavirus~~ ~~(COVID-19) pandemic, we reviewed our oil and gas properties within the Exploration and Production operating segment for impairment.~~ In the first quarter of 2020, we recognized pre-tax impairment charges to reduce the carrying value of our oil and gas properties and certain related right-of-use assets at the North Malay Basin in Malaysia by $755 million ($755 million after income taxes), the South Arne Field in Denmark by $670 million ($594 million after income taxes), and in the Gulf of Mexico, the Stampede Field by $410 million ($410 million after income taxes) and the Tubular Bells Field by $270 million ($270 million after income taxes) primarily as a result of a lower long-term crude oil price outlook. The impairment charges were based on estimates of fair value determined by discounting internally developed future net cash flows, a Level 3 fair value measurement. The total of the fair value estimates was approximately $1.05 billion. Significant inputs used in determining the discounted future net cash flows include future prices, projected production volumes using risk adjusted oil and gas reserves, and discount rates. The future pricing assumptions used were based on forward strip crude oil prices as of March 31, 2020 for the remainder of 2020 through 2022, and $50 per barrel for WTI ($55 per barrel for Brent) in 2023 and thereafter to the end of field life. The weighted average crude oil benchmark price based on total projected crude oil volumes for the impaired assets was $48.82 per barrel. A discount rate of 10% was used in each of the fair value measurements which represents the estimated discount rate a market participant would use. We determined the discount rate by considering the weighted average cost of capital for a group of peer companies.

~~Other Assets:~~

In the first quarter of 2020, we recognized impairment charges totaling $21 million pre-tax ($20 million after income taxes) related to drilling rig right-of-use assets in the Bakken and surplus materials and supplies.

~~3. Inventories~~

~~Inventories consisted of the following:~~

March 31,

December 31,

2020

2019

(In millions)

Crude oil and natural gas liquids

$
74

$
92

Materials and supplies

156

169

Total Inventories

$
230

$
261

In the first quarter of 2020, we recognized charges of $53 million ($52 million after income taxes) ~~recorded~~ in Marketing, including purchased oil and gas to reflect crude oil inventories at ~~quarter-end market~~net realizable value.

~~PART I~~ - ~~FINANCIAL INFORMATION (CONT’D.)~~

~~HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

3. Property, Plant and Equipment

Assets Held for Sale:

In March 2021, we entered into an agreement to sell our interests in Denmark for total consideration of $150 million with an effective date of January 1, 2021. At March 31, 2021, property, plant and equipment and operating lease right-of-use assets totaling $229 million, and asset retirement obligations and operating lease liabilities totaling $138 million, associated with our interests in Denmark were presented as Assets held for sale and as liabilities held for sale within Accrued Liabilities, respectively, in our Consolidated Balance Sheet.

Capitalized Exploratory Well Costs:

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves during the three months ended March 31, ~~2020~~2021 (in millions):

Balance at January 1, 2020

$
584

Additions to capitalized exploratory well costs pending the determination of proved reserves

47

Capitalized exploratory well costs charged to expense

(125
)
Balance at March 31, 2020

$
506


Balance at January 1, 2021	$	459
Additions to capitalized exploratory well costs pending the determination of proved reserves	17
Balance at March 31, 2021	$	476

Capitalized exploratory well costs capitalized for greater than one year following completion of drilling were ~~$319~~$375 million at March 31, ~~2020~~2021 and primarily related toto:

Guyana: :

~~Guyana:~~Approximately ~~80%~~85% of the capitalized well costs in excess of one year relate to ~~twelve~~ successful exploration wells where hydrocarbons were encountered on the Stabroek Block (Hess 30%), offshore Guyana. The operator plans further appraisal drilling ~~for certain fields~~ and is conducting pre-development planning for additional phases of development beyond the ~~two existing~~three previously sanctioned ~~phases of development.~~development projects on the Block.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Joint Development Area (JDA): Approximately 10% of the capitalized well costs in excess of one year relates to the JDA (Hess 50%) in the Gulf of Thailand, where hydrocarbons were encountered in ~~three~~3 successful exploration wells drilled in the western part of Block A-18. The operator has submitted a development plan concept to the regulator to facilitate ongoing commercial negotiations for an extension of the existing gas sales contract to include development of the western part of the Block.

Malaysia: Approximately ~~10%~~5% of the capitalized well costs in excess of one year relate to the North Malay Basin (Hess 50%), offshore Peninsular Malaysia, where hydrocarbons were encountered in ~~five~~1 successful exploration ~~wells.~~well. Subsurface evaluation and pre-development studies ~~for future phases of development~~ are ongoing.

4. Hess Midstream LP

In March 2021, the Corporation received net proceeds of $70 million from the public offering of 3,450,000 Hess-owned Class A shares in Hess Midstream LP. The transaction resulted in an increase in Capital in Excess of Par of $56 million and Noncontrolling Interests of $41 million including $14 million from the change in ownership and $27 million from the recognition of a deferred tax asset due to an increase in tax basis of Hess Midstream LP's investment in Hess Midstream Operations LP. After giving effect to this transaction, the Corporation owns an approximate 46% interest in Hess Midstream LP, on a consolidated basis.

At March 31, ~~2020~~2021 Hess Midstream LP, ~~(Hess Midstream),~~ a variable interest entity that is fully consolidated by Hess Corporation, had liabilities totaling ~~$1,971~~$1,984 million (December 31, ~~2019: $1,941~~2020: $2,026 million) that are on a nonrecourse basis to Hess Corporation, while Hess Midstream LP assets available to settle the obligations of Hess Midstream LP include cash and cash equivalents totaling $3$2 million (December 31, ~~2019:~~2020: $3 million) ~~and~~, property, plant and equipment with a carrying value of ~~$3,029~~$3,095 million (December 31, ~~2019: $3,010~~2020: $3,111 million).

~~6. Debt~~

~~In the first quarter~~ and an equity-method investment of 2020, the Corporation entered into a $1.0 billion three year term loan agreement with JPMorgan Chase Bank N.A. with a maturity date of March 16, 2023. The term loan contains provisions that require us to reduce JPMorgan’s initial funded amount of $1.0 billion. The Corporation is currently$104 million (December 31, 2020: $108 million) in the process of syndicating with other lenders. Borrowings under the term loan bear interest at the applicable interest rates either, at the Corporation’s option, the adjusted LIBOR rate in effect from time to time or the alternate base rate (as described in the term loan agreement) plus the applicable margins specified in the term loan agreement, which generally vary based on the credit ratingLittle Missouri 4 gas processing plant.

5. Accrued Liabilities

Accrued Liabilities consisted of the Corporation’s senior, unsecured, non-credit enhanced long-term debt. This loan has been classified as noncurrent in the consolidated balance sheet due to the Corporation’s ability and intent to refinance any amount we are unable to syndicate to other banks on a long-term basis through the Corporation’s existing $3.5 billion revolving credit facility with a maturity date of May 15, 2023. The term loan agreement contains customary representations, warranties and covenants, including a financial covenant limiting the ratio of Total Consolidated Debt to Total Capitalization (as such terms are defined in the term loan agreement) of the Corporation and its consolidated subsidiaries to 65%, and customary events of default. At March 31, 2020, Hess Corporation had borrowings of $1.0 billion under this term loan agreement and was in compliance with this financial covenant.

following:


	March 31, 2021		December 31, 2020

	(In millions)
Accrued capital expenditures	$	263	$	345
Accrued operating and marketing expenditures	263		325
Accrued payments to royalty and working interest owners	227		170
Liabilities held for sale	138		0
Accrued interest on debt	96		126
Accrued compensation and benefits	93		117
Current portion of asset retirement obligations	156		105
Other accruals	18		63
Total Accrued Liabilities	$	1,254	$	1,251

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~7. Retirement Plans~~

~~Components of net periodic pension cost consisted of the following:~~

Three Months Ended

March 31,

2020

2019

(In millions)

Service cost

$
14

$
10

Interest cost (a)

18

24

Expected return on plan assets (a)

(45
)

(45
)
Amortization of unrecognized net actuarial losses (a)

12

11

Pension (income) expense (a)

$
(1
)

$
—

6. Revenue

Revenue from contracts with customers on a disaggregated basis was as follows:

Exploration and Production

Midstream

Eliminations

Total

United States

Guyana

Malaysia & JDA

Denmark

Libya

E&P Total

(In millions)

Three Months Ended March 31, 2020

Sales of our net production volumes:

Crude oil revenue

$
656

$
38

$
2

$
36

$
—

$
732

$
—

$
—

$
732

Natural gas liquids revenue

49

—

—

—

—

49

—

—

49

Natural gas revenue

38

—

139

2

2

181

—

—

181

Sales of purchased oil and gas

324

1

—

—

—

325

—

—

325

Intercompany revenue

—

—

—

—

—

—

291

(291
)

—

Total sales and other operating revenues before other operating revenues

1,067

39

141

38

2

1,287

291

(291
)

1,287

Other operating revenues (a)

55

6

1

5

—

67

—

—

67

Total sales and other operating revenues

$
1,122

$
45

$
142

$
43

$
2

$
1,354

$
291

$
(291
)

$
1,354

Three Months Ended March 31, 2019

Sales of our net production volumes:

Crude oil revenue

$
682

$
—

$
21

$
16

$
91

$
810

$
—

$
—

$
810

Natural gas liquids revenue

68

—

—

—

—

68

—

—

68

Natural gas revenue

42

—

180

3

6

231

—

—

231

Sales of purchased oil and gas

426

—

—

—

22

448

—

—

448

Intercompany revenue

—

—

—

—

—

—

190

(190
)

—

Total sales and other operating revenues before other operating revenues

1,218

—

201

19

119

1,557

190

(190
)

1,557

Other operating revenues (a)

15

—

—

—

—

15

—

—

15

Total sales and other operating revenues

$
1,233

$
—

$
201

$
19

$
119

$
1,572

$
190

$
(190
)

$
1,572

~~(a)~~

~~Includes gains (losses) on commodity derivatives.~~


	Exploration and Production										Midstream		Eliminations		Total
	United States		Guyana		Malaysia & JDA		Other (a)		E&P Total

	(In millions)
Three Months Ended March 31, 2021
Sales of our net production volumes:
Crude oil revenue	$	885	$	181	$	22	$	116	$	1,204	$	0	$	—	$	1,204
Natural gas liquids revenue	143		0		0		0		143		0		—		143
Natural gas revenue	113		0		163		3		279		0		—		279
Sales of purchased oil and gas	298		4		0		19		321		0		—		321
Intercompany revenue	0		0		0		0		0		289		(289)		—
Total revenues from contracts with customers	1,439		185		185		138		1,947		289		(289)		1,947
Other operating revenues (b)	(41)		(4)		0		(4)		(49)		0		0		(49)
Total sales and other operating revenues	$	1,398	$	181	$	185	$	134	$	1,898	$	289	$	(289)	$	1,898
Three Months Ended March 31, 2020
Sales of our net production volumes:
Crude oil revenue	$	656	$	38	$	2	$	36	$	732	$	0	$	—	$	732
Natural gas liquids revenue	49		0		0		0		49		0		—		49
Natural gas revenue	38		0		139		4		181		0		—		181
Sales of purchased oil and gas	324		1		0		0		325		0		—		325
Intercompany revenue	0		0		0		0		0		291		(291)		—
Total revenues from contracts with customers	1,067		39		141		40		1,287		291		(291)		1,287
Other operating revenues (b)	55		6		1		5		67		0		0		67
Total sales and other operating revenues	$	1,122	$	45	$	142	$	45	$	1,354	$	291	$	(291)	$	1,354

(a)Other includes our interests in Denmark and Libya.

(b)Includes gains (losses) on commodity derivatives.

There have been no significant changes to contracts with customers or composition thereof during the three months ended March 31, ~~2020.~~2021. Generally, we receive payments from customers on a monthly basis, shortly after the physical delivery of the crude oil, natural gas liquids, or natural gas.

7. Impairment

In the first quarter of 2020, we recorded noncash impairment charges totaling $2.1 billion ($2.0 billion after income taxes) related to our oil and gas properties at North Malay Basin in Malaysia, the South Arne Field in Denmark, and the Stampede and Tubular Bells fields in the Gulf of Mexico, primarily as a result of a lower long-term crude oil price outlook. Other charges totaling $21 million pre-tax ($20 million after income taxes) related to drilling rig right-of-use assets in the Bakken and surplus materials and supplies.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

8. Retirement Plans

Components of net periodic pension cost consisted of the following:


	Three Months Ended March 31,
	2021		2020

	(In millions)
Service cost	$	14	$	14
Interest cost (a)	14		18
Expected return on plan assets (a)	(50)		(45)
Amortization of unrecognized net actuarial losses (a)	15		12
Settlement loss (a)	1		0
Pension (income) expense (a)	$	(6)	$	(1)

(a) Net non-service pension cost included in Other, net in the Statement of Consolidated Income for the three months ended March 31, 2021 was income of $20 million (2020: income of $15 million).

In 2021, we expect to contribute approximately $4 million to our funded pension plans.

9. Weighted Average Common Shares

The Net income (loss) and weighted average number of common shares used in the basic and diluted earnings per share computations were as follows:

	Three Months Ended
	March 31,						Three Months Ended March 31,
	2020			2019			2021		2020
	(In millions)
Net income (loss) attributable to Hess Corporation Common Stockholders:
							(In millions)
Net income (loss) attributable to Hess Corporation:						Net income (loss) attributable to Hess Corporation:
Net income (loss)	$	(2,366	)	$	75	Net income (loss)	$	336	$	(2,366)
Less: Net income (loss) attributable to noncontrolling interests		67			43	Less: Net income (loss) attributable to noncontrolling interests	84		67
Less: Preferred stock dividends		—			4
Net income (loss) attributable to Hess Corporation Common Stockholders	$	(2,433	)	$	28

Net income (loss) attributable to Hess Corporation						Net income (loss) attributable to Hess Corporation	$	252	$	(2,433)
Weighted average number of common shares outstanding:						Weighted average number of common shares outstanding:
Basic		304.0			297.4	Basic	305.8		304.0
Effect of dilutive securities						Effect of dilutive securities
Restricted common stock		—			1.2	Restricted common stock	0.8		0
Stock options		—			0.2	Stock options	0.4		0
Performance share units		—			0.9	Performance share units	0.8		0
Diluted		304.0			299.7	Diluted	307.8		304.0

The following table summarizes the number of antidilutive shares excluded from the computation of diluted shares:

During the three months ended March 31, ~~2020,~~2021, we granted ~~1,117,009~~695,832 shares of restricted stock ~~(2019: 941,082)~~(2020: 1,117,009), ~~307,999~~319,295 stock options (2020: 686,639), and 205,155 performance share units ~~(2019: 234,866) and 686,639 stock options (2019: 526,968)~~(2020: 307,999).

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

10. Guarantees and Contingencies

We are subject to loss contingencies with respect to various claims, lawsuits and other proceedings. A liability is recognized in our consolidated financial statements when it is probable that a loss has been incurred and the amount can be reasonably estimated. If the risk of loss is probable, but the amount cannot be reasonably estimated or the risk of loss is only reasonably possible, a liability is not accrued; however, we disclose the nature of those contingencies. We cannot predict with certainty if, how or when existing claims, lawsuits and proceedings will be resolved or what the eventual relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek indeterminate damages.

We, along with many companies that have been or continue to be engaged in refining and marketing of gasoline, have been a party to lawsuits and claims related to the use of methyl tertiary butyl ether (MTBE) in gasoline. A series of similar lawsuits, many involving water utilities or governmental entities, were filed in jurisdictions across the U.S. against producers of MTBE and petroleum refiners who produced gasoline containing MTBE, including us. The principal allegation in all cases was that gasoline containing MTBE was a defective product and that these producers and refiners are strictly liable in proportion to their share of the gasoline market for damage to groundwater resources and are required to take remedial action to ameliorate the alleged effects on the environment of releases of MTBE. The majority of the cases asserted against us have been settled. There are 3 remaining active cases, filed by Pennsylvania, Rhode Island, and Maryland. In June 2014, the Commonwealth of Pennsylvania filed a lawsuit alleging that we and all major oil companies with operations in Pennsylvania, have damaged the groundwater by introducing thereto gasoline with MTBE. The Pennsylvania suit has been forwarded to the existing MTBE multidistrict litigation pending in the Southern District of New York. In September 2016, the State of Rhode Island also filed a lawsuit alleging that we and other major oil companies damaged the groundwater in Rhode Island by introducing thereto gasoline with MTBE. The suit filed in Rhode Island is proceeding in ~~Federal~~federal court. In December 2017, the State of Maryland filed a lawsuit alleging that we and other major oil companies damaged the groundwater in Maryland by introducing thereto

~~PART I~~ - ~~FINANCIAL INFORMATION (CONT’D.)~~

~~HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

gasoline with MTBE. The suit, filed in Maryland state court, was served on us in January 2018 and has been removed to ~~Federal~~federal court by the defendants.

In September 2003, we received a directive from the New Jersey Department of Environmental Protection (NJDEP) to remediate contamination in the sediments of the Lower Passaic River. The NJDEP is also seeking natural resource damages. The directive, insofar as it affects us, relates to alleged releases from a petroleum bulk storage terminal in Newark, New Jersey we previously owned. We and over 70 companies entered into an Administrative Order on Consent with the ~~Environmental Protection Agency (EPA)~~EPA to study the same contamination; this work remains ongoing. We and other parties settled a cost recovery claim by the State of New Jersey and agreed with the EPA to fund remediation of a portion of the site. On March 4, 2016, the EPA issued a Record of Decision (ROD) in respect of the lower eight miles of the Lower Passaic River, selecting a remedy that includes bank-to-bank dredging at an estimated cost of ~~$1.38~~$1.38 billion. The ROD does not address the upper nine miles of the Lower Passaic River or the Newark Bay, which may require additional remedial action. In addition,the ~~Federal~~federal trustees for natural resources have begun a separate assessment of damages to natural resources in the Passaic River. Given that the EPA has not selected a remedy for the entirety of the Lower Passaic River or the Newark Bay, total remedial costs cannot be reliably estimated at this time. Based on currently known facts and circumstances, we do not believe that this matter will result in a significant liability to us because our former terminal did not store or use contaminants which are of concern in the river sediments and could not have contributed contamination along the river’s length. Further, there are numerous other parties who we expect will bear the cost of remediation and damages.

In March 2014, we received an Administrative Order from the EPA requiring us and 26 other parties to undertake the Remedial Design for the remedy selected by the EPA for the Gowanus Canal Superfund Site in Brooklyn, New York. Our alleged liability derives from our former ownership and operation of a fuel oil terminal and connected shipbuilding and repair facility adjacent to the Canal. The remedy selected by the EPA includes dredging of surface sediments and the placement of a cap over the deeper sediments throughout the Canal and in-situ stabilization of certain contaminated sediments that will remain in place below the cap. The EPA’s original estimate was that this remedy would cost $506 ~~million~~;million; however, the ultimate costs that will be incurred in connection with the design and implementation of the remedy remain uncertain. We have complied with the EPA’s March 2014 Administrative Order and contributed funding for the Remedial Design based on an allocation of costs among the parties determined by a third-party expert. In January 2020, we received an additional Administrative Order from the EPA requiring us and several other parties to begin Remedial Action along the uppermost portion of the Canal. We intend to comply with this Administrative Order. The remediation work ~~is anticipated to begin~~began in the fourth quarter of 2020. ~~The~~Based on currently known facts and circumstances, we do not believe that this matter will result in a significant liability to us, and the costs will continue to be allocated amongst the parties, as they were for the Remedial Design.

From time to time, we are involved in other judicial and administrative proceedings relating to environmental matters. We periodically receive notices from the EPA that we are a “potential responsible party” under the Superfund legislation with respect to various waste disposal sites. Under this legislation, all potentially responsible parties may be jointly and severally liable. For any site for which we have received such a notice, the EPA’s claims or assertions of liability against us relating to these sites have not been fully developed, or the EPA’s claims have been settled or a settlement is under consideration, in all cases for amounts that are not

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

material. Beginning in 2017, certain states, municipalities and private associations in California, Delaware, Maryland, Rhode Island and South Carolina separately filed lawsuits against oil, gas and coal producers, including us, for alleged damages purportedly caused by climate change. These proceedings include claims for monetary damages and injunctive relief. Beginning in 2013, various parishes in Louisiana filed suit against approximately 100 oil and gas companies, including us, alleging that the companies’ operations and activities in certain fields violated the State and Local Coastal Resource Management Act of 1978, as amended, and caused contamination, subsidence and other environmental damages to land and water bodies located in the coastal zone of Louisiana. The plaintiffs seek, among other things, the payment of the costs necessary to clear, re-vegetate and otherwise restore the allegedly impacted areas. The ultimate impact of ~~these~~such climate and other aforementioned environmental proceedings, and of any related proceedings by private parties, on our business or accounts cannot be predicted at this time due to the large number of other potentially responsible parties and the speculative nature of clean-up cost ~~estimates but is not expected to be material.~~

~~From time to time, we~~estimates.

We are also involved in other judicial and administrative proceedings from time to time in addition to the matters described above, including ~~proceedings relating~~claims related to ~~other environmental matters.~~post-production deductions from royalty payments. We cannot predict with certainty if, how or when such proceedings will be resolved or what the eventual relief, if any, may be, particularly for proceedings that are in their early stages of development or where plaintiffs seek indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters before a loss or range of loss can be reasonably estimated for any proceeding.

Subject to the foregoing, in management’s opinion, based upon currently known facts and circumstances, the outcome of lawsuits, claims and proceedings, including the matters disclosed above, is not expected to have a material adverse effect on our financial condition, results of operations or cash flows. However, we could incur judgments, enter into settlements, or revise our opinion regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations in the period in which the amounts are accrued and our cash flows in the period in which the amounts are paid.

~~PART I~~ - ~~FINANCIAL INFORMATION (CONT’D.)~~

~~HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

11. Segment Information

We currently have 2 operating segments, Exploration and Production and Midstream. All unallocated costs are reflected under Corporate, Interest and Other. The following table presents operating segment financial data:

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Identifiable assets by operating segment were as follows:

12. Financial Risk Management Activities

In the normal course of our business, we are exposed to commodity risks related to changes in the prices of crude oil and natural ~~gas as well as changes in interest rates and foreign currency values.~~ gas. Financial risk management activities include transactions designed to reduce risk in the selling prices of crude oil or natural gas we produce or by reducing our exposure to foreign currency or interest rate movements. Generally, futures, swaps or option strategies may be used to fix the forward selling price ofor establish a floor price for a portion of our crude oil or natural gas production. Swaps may also be used to fix the difference between current selling prices and forward selling prices in periods of contango for crude oil production that will be stored and sold in the future. Forward contracts may also be used to purchase certain currencies in which we conduct business with the intent of reducing exposure to foreign currency fluctuations. At March 31, ~~2020,~~2021, these forward contracts relate to the British Pound, Danish Krone, Canadian Dollar and ~~the Danish Krone.~~Malaysian Ringgit. Interest rate swaps may be used to convert interest payments on certain long-term debt from fixed to floating rates.

The notional amounts of outstanding financial risk management derivative contracts were as follows:

March 31,
2020

December 31,
2019

(In millions)

Commodity - crude oil (millions of barrels)

41.3

54.9

Foreign exchange

$
65

$
90

Interest rate swaps

$
100

$
100


	March 31, 2021		December 31, 2020

	(In millions)
Commodity - crude oil put options (millions of barrels)	41.3		27.4
Foreign exchange forwards	$	121	$	163
Interest rate swaps	$	100	$	100

As of March 31, 2021, we have purchased West Texas Intermediate (WTI) put options of 120,000 barrels of oil per day (bopd) with an average monthly floor price of $55 per barrel ~~for 130,000 barrels of oil per day (bopd),~~ and Brent put options of 30,000 bopd with an average monthly floor price of $60 per barrel for ~~20,000 bopd.~~

the remainder of 2021.

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The table below reflects the ~~gross and net~~ fair values of risk management derivative ~~instruments~~instruments.


	Assets		Liabilities

	(In millions)
March 31, 2021
Derivative Contracts Designated as Hedging Instruments:
Crude oil put options	$	154	$	0
Interest rate swaps	4		0
Total derivative contracts designated as hedging instruments	158		0
Derivative Contracts Not Designated as Hedging Instruments:
Foreign exchange forwards	0		(2)
Total derivative contracts not designated as hedging instruments	0		(2)
Gross fair value of derivative contracts	158		(2)
Gross amounts offset in the Consolidated Balance Sheet	0		0
Net Amounts Presented in the Consolidated Balance Sheet	$	158	$	(2)
December 31, 2020
Derivative Contracts Designated as Hedging Instruments:
Crude oil put options	$	64	$	0
Crude oil swaps	0		(54)
Interest rate swaps	5		0
Total derivative contracts designated as hedging instruments	69		(54)
Derivative Contracts Not Designated as Hedging Instruments:
Foreign exchange forwards	0		(1)
Total derivative contracts not designated as hedging instruments	0		(1)
Gross fair value of derivative contracts	69		(55)
Gross amounts offset in the Consolidated Balance Sheet	(13)		13
Net Amounts Presented in the Consolidated Balance Sheet	$	56	$	(42)

During the first quarter of 2021, we completed the sale of 4.2 million barrels of Bakken crude oil transported and ~~their respective financial statement caption~~stored on 2 VLCCs during 2020 for sale in Asian markets. We recognized net losses of $4 million from crude oil hedging contracts associated with the VLCC volumes in the first quarter of 2021.

The fair value of our crude oil put options and crude oil swaps is presented within Other current assets and Accrued liabilities, respectively, in our Consolidated Balance Sheet:

Assets

Liabilities

(In millions)

March 31, 2020

Derivative Contracts Designated as Hedging Instruments:

Crude oil derivative contracts

$
1,098

$
—

Interest rate - Other assets (noncurrent)

6

—

Total derivative contracts designated as hedging instruments

1,104

—

Derivative Contracts Not Designated as Hedging Instruments:

Foreign exchange

—

(2
)
Total derivative contracts not designated as hedging instruments

—

(2
)
Gross fair value of derivative contracts

1,104

(2
)
Master netting arrangements

—

—

Net Fair Value of Derivative Contracts

$
1,104

$
(2
)

December 31, 2019

Derivative Contracts Designated as Hedging Instruments:

Crude oil derivative contracts

$
125

$
—

Interest rate - Other assets (noncurrent)

1

—

Total derivative contracts designated as hedging instruments

126

—

Derivative Contracts Not Designated as Hedging Instruments:

Foreign exchange

—

(1
)
Total derivative contracts not designated as hedging instruments

—

(1
)
Gross fair value of derivative contracts

126

(1
)
Master netting arrangements

—

—

Net Fair Value of Derivative Contracts

$
126

$
(1
)

. The fair value of our interest rate swaps is presented within Other assets in our Consolidated Balance Sheet. The fair value of our foreign exchange forwards is presented within Accrued liabilities in our Consolidated Balance Sheet. All fair values in the table above are based on Level 2 inputs.

Derivative contracts designated as hedging instruments:

Crude oil derivatives: Crude oil hedging contracts ~~increased~~decreased Sales and other operating revenues by ~~$64 million~~ ~~and~~ ~~$15~~$51 million in the first quarter of ~~2020~~2021, including hedge contracts associated with the VLCC transactions, and ~~2019~~increased ~~, respectively.~~ Sales and other operating revenues by $64 million in the first quarter of 2020. At March 31, ~~2020,~~2021, pre-tax deferred ~~gains~~losses in Accumulated other comprehensive income (loss)related to outstanding crude oil price hedging contracts were $~~831~~$47 million, all of which will be reclassified into earnings during the remainder of ~~2020~~2021 as the originally hedged crude oil sales are recognized in earnings.

Interest rate swaps designated as fair value hedges: At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had interest rate swaps with gross notional amounts totaling $100 million, which were designated as fair value hedges and relate to debt where we have converted interest payments ~~on certain long-term debt~~ from fixed to floating rates. Changes in the fair value of interest rate swaps and the hedged fixed-rate debt are recorded inInterest expensein theStatement of Consolidated Income. In the ~~first quarter of 2020,~~three months ended March 31, 2021, the change in fair value of interest rate swaps was ana decrease in the asset of $1 million (2020 Q1: increase in the asset of $5 ~~million (2019 Q1: decrease in the liability of $1~~ million) with a corresponding adjustment in the carrying value of the hedged fixed-rate debt.

Derivative contracts not designated as hedging instruments:

Foreign exchange: Foreign exchange gains and losses which are reported in Other, netin Revenues and non-operating income in theStatement of Consolidated Incomewere ~~a loss~~losses of $1 million in the ~~first quarter of 2020 (2019~~three months ended March 31, 2021 (2020 Q1: $5$1 million ~~gain)~~loss). A component of foreign exchange ~~gain~~gains and losses is the result of foreign exchange derivative contracts that are not designated as hedges which amounted to a net ~~gain~~losses of $2$1 million in the ~~first quarter of 2020 (2019~~three months ended March 31, 2021 (2020 Q1: ~~a net loss of less than $1 million)~~$2 million gain).

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Fair Value Measurement:

At March 31, 2021, our total long-term debt, which was substantially comprised of fixed rate debt instruments, had a carrying value of $8,286 million and a fair value of $9,381 million, based on Level 2 inputs in the fair value measurement hierarchy. We also have ~~other~~ short-term financial instruments, primarily cash equivalents, accounts receivable, and accounts payable, for which the carrying value approximated fair value at March 31, 2021 and December 31, 2020. At

13. Subsequent Events

On April 30, 2021, we completed the sale of our previously announced Little Knife and Murphy Creek nonstrategic acreage interests in the Bakken for total consideration of $312 million with an effective date of March ~~31, 2020, total long-term debt,~~1, 2021. The sale included approximately 78,700 net acres, which are located in the southernmost portion of the Corporation's Bakken position and are not connected to Hess Midstream LP infrastructure. Net production from the acreage during the first quarter of 2021 was ~~primarily comprised~~approximately 4,500 barrels of ~~fixed-rate debt instruments, had a carrying value~~oil equivalent per day (boepd).

On April 13, 2021, we amended the Corporation's fully undrawn $3.5 billion revolving credit facility by extending the facility's expiration date for one year to May 2024 and incorporating customary provisions for the eventual replacement of ~~$8,194 million and a fair value of $6,468 million based on Level 2 inputs.~~

the London Interbank Offered Rate (LIBOR).

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

~~Item 2.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with the unaudited consolidated financial statements and accompanying footnotes for the quarter ended March 31, ~~2020~~2021 included under Item 1. Financial Statements of this Form 10-Q and the audited consolidated financial statements and related notes included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those ~~identified below under the section entitled “Risk Factors” and those~~ discussed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

2020.

Hess Corporation is a global ~~Exploration and Production (E&P)~~E&P company engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids, ~~(NGLs),~~ and natural gas with production operations located primarily in the United States (U.S.), Guyana, the Malaysia/Thailand Joint Development Area (JDA), Malaysia, and Denmark. We conduct exploration activities primarily offshore Guyana, in the U.S. Gulf of Mexico, and offshore Suriname and Canada. At the Stabroek Block (Hess 30%), offshore Guyana, we have announced ~~sixteen~~eighteen significant discoveries. The Liza Phase 1 development achieved first production in December 2019, ~~with peak~~and has a nameplate production ~~expected to reach up to~~capacity of approximately 120,000 gross bopd. The Liza Phase 2 development was sanctioned in the second quarter of 2019 and remains on track to achieve first production by early 2022, with production capacity of approximately 220,000 gross bopd. A third development, Payara, was sanctioned in the third quarter of 2020 and is expected to ~~start up~~achieve first production in ~~2022~~2024, with production ~~reaching~~capacity of approximately 220,000 gross bopd. The discovered resources to date on the Stabroek Block are expected to underpin up to ~~220,000 gross bopd.~~

ten floating production, storage and offloading vessels (FPSOs) with the first six FPSOs expected by 2027.

Our Midstream operating segment, which is comprised of Hess Corporation’s ~~47%~~approximate 46% consolidated ownership interest in Hess Midstream LP at March 31, 2021, provides fee-based services, including gathering, compressing and processing natural gas and fractionating ~~NGL;~~natural gas liquids (NGL); gathering, terminaling, loading and transporting crude oil and NGL; storing and terminaling propane, and water handling services primarily in the Bakken shale play in the Williston Basin area of North Dakota.

See Note 4, Hess Midstream LP in the Notes to Consolidated Financial Statements.

Hess Response to Global Pandemic ~~and Market Conditions~~

~~The~~

COVID-19 ~~pandemic~~ continues to have a profound impact on society and industry. The Corporation’s first priority in the midst of the ~~COVID-19~~ pandemic has been the health and safety of the Hess workforce and local ~~communities.~~communities where the Corporation operates. A multidisciplinary Hess emergency response team has been overseeing plans and precautions to reduce the risks of COVID-19 in the work environment while maintaining business continuity based on the most current recommendations by government and public health agencies. The Corporation has implemented a variety of health and safety measures including enhanced cleaning procedures and modified work practices such as travel restrictions, health screenings, reduced personnel at offshore platforms and onshore work sites wherever this can be done safely, and remote working arrangements for office workers.

In addition to the global health concerns of COVID-19, the pandemic has severely impacted demand for oil. In response to the resulting sharp decline in oil prices, the Corporation’s focus is on preserving cash and capability, while protecting the long-term value of its assets. Hess entered into a new $1.0 billion three-year term loan agreement and further reduced its

First Quarter Outlook

The 2021 E&P capital and exploratory expenditure budget ~~for 2020 to~~is $1.9 billion, ~~a 37% reduction from~~with more than 80% allocated to Guyana and the ~~original budget~~Bakken. Oil and gas production in 2021, excluding Libya, is now forecast to be in the range of ~~$3.0 billion. This reduction will be achieved primarily by shifting from a six-rig program~~290,000 boepd to ~~one rig~~295,000 boepd. For the remainder of 2021, we have hedged 120,000 bopd with $55 WTI put options and 30,000 bopd with $60 Brent put options.

In March 2021, the Corporation received net proceeds of $70 million for the public offering of 3,450,000 Class A shares of Hess Midstream LP. In March 2021, we entered into an agreement to sell our interests in Denmark for total consideration of $150 million, with an effective date of January 1, 2021. The sale is expected to close during the third quarter of 2021, subject to customary closing conditions. On April 30, 2021, we completed the sale of our previously announced Little Knife and Murphy Creek nonstrategic acreage interests in the Bakken ~~and deferring discretionary spending across the portfolio including a six to twelve month deferral in the development~~for total consideration of ~~the Payara Field and reduced 2020 drilling activity on the Stabroek Block offshore Guyana.~~

~~As a result~~$312 million, with an effective date of the unprecedented reduction in demand due to COVID-19, commercial storage in the United States is expected to reach capacity in the second quarter, which is requiring curtailments and shut-ins of production by the industry. To maximize the value of Hess production, the Corporation has chartered three very large crude carriers (VLCCs) to store 2 million barrels each of May, June and July Bakken crude oil production that is expected to be sold in the fourth quarter of 2020.

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Overview (continued)~~

Slowing economic activity caused by the pandemic has impacted natural gas nominations at the Corporation’s North Malay Basin (NMB) and JDA assets in Southeast Asia. Production in the first quarter for NMB and JDA was 58,000 barrels of oil equivalent per day (boepd) compared to 68,000 boepd in the first quarter of 2019. Nominations have been reduced due to the decline in business activity and production from NMB and JDA is forecast to be approximately 35,000 boepd in the second quarter and approximately 50,000 boepd for the full year 2020. In Guyana, the operator has temporarily idled two of the four drilling rigs on the Stabroek Block due to pandemic-related travel restrictions. The Liza Destiny floating production, offloading, and storage vessel (FPSO) is expected to reach its full capacity of 120,000 gross bopd, in June, with April gross production of approximately 75,000 bopd. Despite pandemic-related delays, the Liza Phase 2 development remains on schedule to start production in 2022.

~~First Quarter Results~~

~~In the first quarter of 2020, we incurred a net loss~~ of $2,433 million, compared with net income of $32 million in the first quarter of 2019. Excluding items affecting comparability of earnings between periods detailed on page 22, we incurred an adjusted net loss of $182 million in the first quarter of 2020. The decline in adjusted first quarter 2020 results, compared with the prior-year quarter, primarily reflects lower realized selling prices from the weak commodity price environment, partially offset by higher production volumes.

March 1, 2021.

~~2020 Outlook~~

~~With~~2020. Excluding our ~~revised capital~~Midstream segment, we ended the first quarter of 2021 with approximately $1.86 billion in cash and exploratory budget of $1.9 billion, we forecast oil and gas production in 2020, excluding Libya, to be approximately 320,000 boepd, which is down from the original guidance range of 330,000 boepd to 335,000 boepd. We have in excess of 80% of our forecasted crude oil production for the remainder of 2020 hedged with $55 WTI put options for 130,000 bopd and $60 Brent put options for 20,000 bopd. We also have no near-term debt maturities aside from the new term loan in March 2023.

cash equivalents. In ~~2020,~~2021, based on current forward strip crude oil prices, we expect cash flow from operating activities, ~~including settlements~~expected proceeds from ~~crude oil put option contracts,~~asset sales, and cash and cash equivalents ~~existing~~ at March 31, ~~2020 of $2.1 billion, and our available committed revolving credit facility~~2021 will be sufficient to fund our capital investment program and dividends. ~~Due to the weak commodity price environment, we~~We may take any of the following steps, or a combination thereof, to improve our liquidity and financial position: ~~further~~ reduce the planned capital program and other cash outlays, including dividends, pursue asset sales, borrow against our committed revolving credit facility, or issue debt or equity ~~securities, and pursue asset sales.~~securities.

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Overview (continued)

~~Exploration and Production~~

First Quarter Results

~~In the first quarter of 2020, E&P had a net~~ ~~loss of $2,371 million, compared with net~~

Net income ~~of $109~~was $252 million in the first quarter of ~~2019.~~2021, compared with a net loss of $2,433 million in the first quarter of 2020. Excluding items affecting comparability of earnings between periods detailed on page 24, we incurred an adjusted net loss of $182 million in the first quarter of 2020. The improvement in first quarter 2021 results against adjusted results for the prior-year quarter is primarily due to higher realized selling prices, contribution from the sale of two VLCC cargos, and lower depletion, depreciation and amortization expenses.

Exploration and Production Results

In the first quarter of 2021, E&P had net income of $308 million, compared with a net loss of $2,371 million in the first quarter of 2020. Excluding items affecting comparability of earnings between periods, the adjusted net loss ~~for~~was $120 million in the first quarter of ~~2020 was $120 million.~~2020. Total net production, excluding Libya, averaged ~~344,000~~ 315,000 boepd in the first quarter ~~of 2020,~~2021, compared with ~~278,000~~344,000 boepd in the first quarter of ~~2019.~~2020 or 332,000 boepd pro forma for the sale of our interest in the Shenzi Field. The av~~erage~~average realized crude oil selling price, including hedging, was ~~$45.94 per barrel, down from $55.91~~$50.02 per barrel in the first quarter of ~~2019.~~2021, compared with $45.94 per barrel in the first quarter of 2020. The average realized ~~NGLs~~NGL selling price in the first quarter of ~~2020~~2021 was ~~$9.32~~$29.49 per barrel, ~~down from $18.46~~compared with $9.32 per barrel in the prior-year quarter, while the average realized natural gas selling price was ~~$3.16~~$4.90 per thousand cubic feet (mcf)~~, down from $4.43~~ in the first quarter of 2021, compared with $3.16 per mcf in the first quarter of ~~2019.~~

2020.

The following is an update of ~~our ongoing~~significant E&P activities:

•

~~In North Dakota, net production from the Bakken oil shale play averaged 190,000~~•In North Dakota, net production from the Bakken oil shale play averaged 158,000 boepd for the first quarter of 2021 (2020 Q1: 190,000 boepd), primarily due to reduced drilling activity, lower NGL and natural gas volumes received under percentage of proceeds contracts due to higher NGL prices, and the impact of adverse winter weather. NGL and natural gas volumes received under percentage of proceeds (POP) contracts were 19,000 boepd in the first quarter of 2020, but were reduced to 11,000 boepd in the first quarter of 2021 due to higher realized NGL prices lowering volumes received as consideration for gas processing fees under the POP contracts. During the quarter, we drilled 11 wells, completed 10 wells, and brought 4 new wells online. In February, we increased the number of operated rigs from one to two. We forecast net production to average approximately 155,000 boepd for the second quarter of 2021 and in the range of 155,000 boepd to 160,000 boepd for the full year 2021 reflecting the impact of lower NGL volumes received as consideration for gas processing fees under POP contracts due to higher NGL prices, the sale of the Corporation’s nonstrategic acreage interests, and adverse winter weather.

During the first quarter of 2021, we completed the sale of 4.2 million barrels of Bakken crude oil transported and stored on two VLCCs during 2020, which contributed net income of approximately $70 million in the first quarter of 2021.

On April 30, 2021, we completed the sale of our previously announced Little Knife and Murphy Creek nonstrategic acreage interests in the Bakken for total consideration of $312 million with an effective date of March 1, 2021. The sale included approximately 78,700 net acres, which are located in the southernmost portion of the Corporation's Bakken position and are not connected to Hess Midstream LP infrastructure. Net production from the acreage during the first quarter of 2021 was approximately 4,500 boepd.

•In the Gulf of Mexico, net production for the first quarter of 2021 averaged 56,000 boepd (2020 Q1: 74,000 boepd), reflecting the sale of our interest in the Shenzi Field in the fourth quarter of 2020 and natural field decline. Net production from the Shenzi Field was 12,000 boepd in the first quarter of 2020.

•At the Stabroek Block (Hess 30%), offshore Guyana, net production from the Liza Phase 1 development averaged 31,000 bopd for the first quarter of 2021 (2020 Q1: 15,000 bopd). The Liza Destiny FPSO reached its nameplate capacity of 120,000 gross bopd in December 2020 and remained at this level during the first quarter of 2021. In mid-April, production from the Liza Destiny FPSO was curtailed for several days after a leak was detected in the flash gas compressor discharge silencer. Production has since ramped back up and is expected to remain in the range of 100,000 to 110,000 gross bopd until repairs to the discharge silencer are completed in approximately three months. Following this repair, production is expected to return to, or above, nameplate capacity. In addition, an order has been placed for an upgraded flash gas compression system, which is expected to be installed on the Liza Destiny in the fourth quarter of 2021.

Startup of 2020 (2019 Q1: 130,000 boepd), with net oil production up 34% to 114,000 bopd from 85,000 bopd in the year-ago period, primarily due to increased drilling activity and improved well performance. Natural gas and NGLs production were also higher due to the increased drilling activity, as well as additional natural gas captured with the start-up of the Little Missouri 4 natural gas processing plant in July 2019 and additional NGLs received under percentage of proceeds contracts resulting from lower prices. The Corporation operated six rigs in the first quarter, drilling 41 wells, completing 50 wells and bringing 37 new wells online. We forecast net production to average approximately 175,000 boepd for full year 2020 versus original guidance of 180,000 boepd, reflecting a reduction in the rig count to one from six by the end of May in response to the weak commodity price environment. To date, we have chartered three VLCCs to store 2 million barrels each of May, June and July Bakken crude oil production that is expected to be sold in the fourth quarter of 2020, to maximize the value of Hess production.

•

~~In the Gulf of Mexico, net production for the first quarter of 2020~~ ~~averaged~~ 74,000 boepd (2019 Q1: 70,000 boepd). The Esox-1 oil discovery in Mississippi Canyon (Hess - 57%) achieved first production in February as a low-cost tieback to the Tubular Bells production facilities.

•

At the Stabroek Block (Hess - 30%), offshore Guyana, net production from the Liza Phase 1 development for the first quarter of 2020 averaged 15,000 bopd following first production in December 2019. The operator, Esso Exploration and Production Guyana Limited, expects the Liza Destiny FPSO to reach full capacity of 120,000 gross bopd in June. The first one million barrel cargo of oil allocated to Hess was sold in March 2020.

•

In the Gulf of Thailand, net production from Block A-18 of the JDA averaged 32,000 boepd for the first quarter of 2020 (2019 Q1: 37,000 boepd), including contribution from unitized acreage in Malaysia. Net production from North Malay Basin, ~~offshore Peninsular Malaysia, averaged 26,000 boepd for the first quarter of 2020 (2019 Q1: 31,000 boepd).~~

six FPSOs expected by 2027.

•

~~At the Waha fields (Hess - 8%), onshore Libya, production ceased following the declaration of force majeure in January by the~~ ~~Libyan National Oil Corporation as a result of civil unrest. Net production averaged 5,000 boepd for the first quarter of 2020 (2019 Q1: 21,000 boepd).~~

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Overview (continued)

In April 2021, we announced a discovery at the Uaru-2 well, which encountered approximately 120 feet of high quality oil bearing sandstone reservoir, including newly identified intervals below the original Uaru-1 discovery. The well was drilled in 5,659 feet of water and is located approximately 6.8 miles south of the Uaru-1 well.

The Stena DrillMax is currently appraising the Longtail discovery, which will include a planned sidetrack. The Noble Don Taylor will drill the Mako-2 well after Uaru-2, and the Stena Carron is currently drilling the Koebi-1 exploration well. The Noble Tom Madden, the Noble Bob Douglas and the Noble Sam Croft, which recently arrived at the Stabroek Block, are primarily focused on development drilling.

•

In the Gulf of Thailand, net production from Block A-18 of the JDA averaged 37,000 boepd for the first quarter of 2021 (2020 Q1: 32,000 boepd), including contribution from unitized acreage in Malaysia, while net production from North Malay Basin, offshore Peninsular Malaysia, averaged 27,000 boepd for the first quarter of 2021 (2020 Q1: 26,000 boepd). Net production was higher at the JDA and North Malay Basin due to a recovery in economic activity.

•At the Waha fields (Hess 8%), onshore Libya, net production averaged approximately 18,000 boepd (2020 Q1: 5,000 boepd), with the increase from the prior-year quarter due to the lifting of force majeure by the national oil company of Libya in October 2020.

•In March, we entered into an agreement to sell our interests in Denmark for total consideration of $150 million, with an effective date of January 1, 2021. Net production from Denmark during the first quarter of 2021 was 6,000 boepd (2020 Q1: 7,000 boepd). The sale is expected to close during the third quarter of 2021, subject to customary adjustments.

The following is an update of significant Midstream activities during the first quarter of 2021:

•In March 2021, the Corporation received net proceeds of $70 million from the public offering of 3,450,000 Hess-owned Class A shares of Hess Midstream LP. After giving effect to this transaction, the Corporation owns an approximate 46% interest in Hess Midstream LP, on a consolidated basis.

Consolidated Results of Operations

The after-tax income (loss) by major operating activity is summarized below:

Three Months Ended

March 31,

2020

2019

(In millions, except per share amounts)

Net Income (Loss) Attributable to Hess Corporation:

Exploration and Production

$
(2,371
)

$
109

Midstream

61

37

Corporate, Interest and Other

(123
)

(114
)
Total

$
(2,433
)

$
32

Net Income (Loss) Attributable to Hess Corporation Per Common Share - Diluted (a)

$
(8.00
)

$
0.09

~~(a)~~

~~Calculated as net income (loss) attributable to Hess Corporation less preferred stock dividends, divided by weighted average number of diluted shares.~~


	Three Months Ended March 31,
	2021		2020

	(In millions, except per share amounts)
Net Income (Loss) Attributable to Hess Corporation:
Exploration and Production	$	308	$	(2,371)
Midstream	75		61
Corporate, Interest and Other	(131)		(123)
Total	$	252	$	(2,433)
Net Income (Loss) Attributable to Hess Corporation Per Common Share:
Basic	$	0.82	$	(8.00)
Diluted	$	0.82	$	(8.00)

PART I - FINANCIAL INFORMATION (CONT'D.)

Consolidated Results of Operations (continued)

Items Affecting Comparability of Earnings Between Periods

The following table summarizes, on an after-tax basis, items of income (expense) that are included in net income (loss) and affect comparability of earnings between periods:


	Three Months Ended						Three Months Ended March 31,
	March 31,						2021		2020
	2020			2019
	(In millions)						(In millions)
Items Affecting Comparability of Earnings Between Periods, After-Tax:						Items Affecting Comparability of Earnings Between Periods, After-Tax:
Exploration and Production	$	(2,251	)	$	—	Exploration and Production	$	—	$	(2,251)
Midstream		—			—	Midstream	—		—
Corporate, Interest and Other		—			—	Corporate, Interest and Other	—		—
Total	$	(2,251	)	$	—	Total	$	—	$	(2,251)

The items in the table above are explained on page ~~22.~~

24.

Reconciliations of GAAP and non-GAAP measures

The following table reconciles reported net income (loss) attributable to Hess Corporation and adjusted net income (loss) attributable to Hess Corporation:

The following table reconciles reported net cash provided by (used in) operating activities and cash provided by (used in) operating activities before changes in operating assets and liabilities:

Adjusted net income (loss) attributable to Hess Corporation is a non-GAAP financial measure, which we define as reported net income (loss) attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods, which are summarized on page ~~22.~~24. Management uses adjusted net income (loss) to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations.

Net cash provided by (used in) operating activities before changes in operating assets and liabilities presented in this report is a non-GAAP measure, which we define as reported net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses net cash provided by (used in) operating activities before changes in operating assets and liabilities to evaluate the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt and believes that investors’ understanding of our ability to generate cash to fund these items is enhanced by disclosing this measure, which excludes working capital and other movements that may distort assessment of our performance between periods.

These measures are not, and should not be viewed as, substitutes for U.S. GAAP net income (loss) and net cash provided by (used in) operating activities.

PART I - FINANCIAL INFORMATION (CONT'D.)

Consolidated Results of Operations (continued)

In the following discussion and elsewhere in this report, the financial effects of certain transactions are disclosed on an after-tax basis. Management reviews segment earnings on an after-tax basis and uses after-tax amounts in its review of variances in segment earnings. Management believes that after-tax amounts are a preferable method of explaining variances in earnings, since they show the entire effect of a transaction rather than only the pre-tax amount. After-tax amounts are determined by applying the income tax rate in each tax jurisdiction to pre-tax amounts.

Comparison of Results

Exploration and Production

Following is a summarized income statement of our E&P operations:

Excluding the E&P items affecting comparability of earnings between periods detailed on page ~~22,~~24, the changes in E&P results are primarily attributable to changes in selling prices, production and sales volumes, marketing expenses, cash operating costs, Midstream tariffs, depreciation, depletion and amortization (DD&A), exploration expenses and income taxes, as discussed below.

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Consolidated Results of Operations (continued)

Selling Prices: ~~Lower~~Higher realized selling prices in the first quarter of ~~2020 decreased~~2021, increased after-tax results by approximately ~~$235~~$270 million, compared to the same period in ~~2019.~~2020. Average selling prices were as follows:

Three Months Ended

March 31,

2020

2019

Average Selling Prices (a)

Crude Oil – Per Barrel (Including Hedging)

United States

Onshore

$
44.05

$
52.16

Offshore

49.33

59.30

Total United States

45.63

54.76

Guyana

43.26

—

Malaysia and JDA

51.24

59.38

Denmark

55.60

67.26

Libya

—

62.71

Worldwide

45.94

55.91

Crude Oil – Per Barrel (Excluding Hedging)

United States

Onshore

$
40.54

$
50.91

Offshore

45.65

58.05

Total United States

42.07

53.51

Guyana (b)

36.79

—

Malaysia and JDA

51.24

59.38

Denmark

49.14

67.26

Libya

—

62.71

Worldwide

42.08

54.84

Natural Gas Liquids – Per Barrel

United States

Onshore

$
9.31

$
18.69

Offshore

9.39

17.21

Worldwide

9.32

18.46

Natural Gas – Per Mcf

United States

Onshore

$
1.28

$
2.46

Offshore

1.32

2.54

Total United States

1.30

2.50

Malaysia and JDA

4.71

5.28

Denmark

3.73

4.02

Libya

4.89

5.14

Worldwide

3.16

4.43

~~(a)~~

Selling prices in the United States are adjusted for certain processing and distribution fees included in Marketing expenses. Excluding these fees Worldwide selling prices for the first quarter of 2020 were $49.44 (Q1 2019: $59.18) per barrel for crude oil (including hedging), $45.58 (Q1 2019: $58.11) per barrel for crude oil (excluding hedging), $9.52 (Q1 2019: $18.62) per barrel for NGLs and $3.26 (Q1 2019: $4.49) per mcf for natural gas.


	Three Months Ended March 31,
	2021		2020

Average Selling Prices (a)
Crude Oil – Per Barrel (Including Hedging)
United States
North Dakota (b)	$	44.97	$	44.05
Offshore	53.03		49.33
Total United States	46.73		45.63
Guyana	60.37		43.26
Malaysia and JDA	63.27		51.24
Other (c)	57.66		55.60
Worldwide	50.02		45.94
Crude Oil – Per Barrel (Excluding Hedging)
United States
North Dakota (b)	$	47.62	$	40.54
Offshore	56.53		45.65
Total United States	49.56		42.07
Guyana	61.85		36.79
Malaysia and JDA	63.27		51.24
Other (c)	59.61		49.14
Worldwide	52.52		42.08
Natural Gas Liquids – Per Barrel
United States
North Dakota	$	30.32	$	9.31
Offshore	21.25		9.39
Worldwide	29.49		9.32
Natural Gas – Per Mcf
United States
North Dakota	$	5.93	$	1.28
Offshore	2.95		1.32
Total United States	4.78		1.30
Malaysia and JDA	5.04		4.71
Other (c)	2.69		4.26
Worldwide	4.90		3.16

~~(b)~~(a)Selling prices in the United States are adjusted for certain processing and distribution fees included in Marketing expenses. Excluding these fees worldwide selling prices for the first quarter of 2021 would be $56.54 (2020 Q1: $49.44) per barrel for crude oil (including hedging), $59.04 (2020 Q1: $45.58) per barrel for crude oil (excluding hedging), $29.73 (2020 Q1: $9.52) per barrel for NGLs and $5.02 (2020 Q1: $3.26) per mcf for natural gas.

Hess Corporation sold its first allocated one million barrel cargo of oil from the Liza Field in March 2020. The realized price reflects the Brent benchmark prices used in the pricing formula at the time of sale in March.

(b)Excluding the two VLCC cargo sales totaling 4.2 million barrels, the first quarter 2021 North Dakota crude oil price excluding hedging was $53.30 per barrel and $49.73 per barrel including hedging.

(c)Other includes our interests in Denmark and Libya.

Crude oil hedging activities were a net loss of $51 million before and after income taxes in the first quarter of 2021, and a net gain of $64 million before and after income taxes in the first quarter of ~~2020, and a net gain~~2020.

As of ~~$15 million before and after income taxes in the first quarter of 2019. For calendar year 2020,~~March 31, 2021, we have WTI put options with an average monthly floor price of $55 per barrel for ~~130,000~~120,000 bopd, and Brent put options with an average monthly floor price of $60 per barrel for ~~20,000 bopd. At March 31, 2020,~~30,000 bopd for the ~~fair value~~remainder of the put option contracts was $1,098 million. Sales volumes will be underlifted by approximately 4 million barrels of oil in the second quarter and 2 million barrels of oil in the third quarter as a result of using the VLCCs. While we will receive cash for settlement gains as the $55 WTI put option contracts mature, the net realized gain on contracts associated with the 6 million barrels of underlifted oil, comprised of the cash settlement less the associated amortization of premiums paid, will be deferred until the volumes stored in the VLCCs are sold.year. We ~~now~~ expect noncash put option premium amortization, which will be reflected in realized selling prices, to reduce our second quarter results by ~~approximately $50~~$64 million and ~~reduce~~ our full year ~~2020~~2021 results by approximately ~~$280 million, which is unchanged from our previous full-year guidance.~~$245 million.

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Consolidated Results of Operations (continued)

Production Volumes: Our daily worldwide net production was as follows:

Three Months Ended

March 31,

2020

2019

(In thousands)

Crude Oil – Barrels

United States

North Dakota (a)

114

86

Offshore

48

49

Total United States

162

135

Guyana

15

—

Malaysia and JDA

4

4

Denmark

6

6

Libya

4

19

Total

191

164

Natural Gas Liquids – Barrels

United States

North Dakota (a)

49

34

Offshore

7

6

Total United States

56

40

Natural Gas – Mcf

United States

North Dakota (a)

162

79

Offshore

113

92

Total United States

275

171

Malaysia and JDA

325

381

Denmark

6

7

Libya

5

13

Total

611

572

Barrels of Oil Equivalent (b)

349

299

Crude oil and natural gas liquids as a share of total production

71
%

68
%

~~(a)~~

~~Net production from the Bakken was 190,000 boepd in the first quarter of 2020 compared with 130,000 boepd in the first quarter of 2019.~~


	Three Months Ended March 31,
	2021		2020

	(In thousands)
Crude Oil – Barrels
United States
North Dakota	84		114
Offshore	36		48
Total United States	120		162
Guyana	31		15
Malaysia and JDA	4		4
Other (a)	22		10
Total	177		191
Natural Gas Liquids – Barrels
United States
North Dakota	49		49
Offshore	4		7
Total United States	53		56
Natural Gas – Mcf
United States
North Dakota	151		162
Offshore	95		113
Total United States	246		275
Malaysia and JDA	360		325
Other (a)	11		11
Total	617		611
Barrels of Oil Equivalent (b)	333		349

Crude oil and natural gas liquids as a share of total production	69	%	71	%

~~(b)~~(a)Other includes our interest in Denmark and Libya. Net production from Libya was 18,000 boepd in the first quarter of 2021 compared with 5,000 boepd in the first quarter of 2020. Net production form Denmark was 6,000 boepd in the first quarter of 2021, compared with 7,000 boepd in the first quarter of 2020.

Reflects natural gas production converted based on relative energy content (six mcf equals one barrel). Barrel of oil equivalence does not necessarily result in price equivalence as the equivalent price of natural gas on a barrel of oil equivalent basis has been substantially lower than the corresponding price for crude oil over the recent past. In addition, NGLs do not sell at prices equivalent to crude oil. See the average selling prices in the table on page 19.

(b)Reflects natural gas production converted based on relative energy content (six mcf equals one barrel). Barrel of oil equivalence does not necessarily result in price equivalence as the equivalent price of natural gas on a barrel of oil equivalent basis has been substantially lower than the corresponding price for crude oil over the recent past. In addition, NGLs do not sell at prices equivalent to crude oil. See the average selling prices in the table on page 21.

We forecast net production, excluding Libya, to be in the range of ~~310,000~~290,000 boepd ~~to 315,000~~and 295,000 boepd for the second quarter and ~~approximately 320,000 boepd~~ for the full year ~~of 2020.~~

2021.

United States: North Dakota net ~~oil~~ production was ~~higher~~lower in the first quarter of ~~2020,~~2021, compared to the ~~year-ago quarter,~~corresponding period in 2020, primarily due to ~~increased~~reduced drilling activity, lower NGL and ~~improved well performance. North Dakota net~~ natural gas and NGLs production was higher in the first quarter of 2020, compared to the year-ago quarter, also due to the increased drilling activity, as well as additional natural gas captured with the start-up of the Little Missouri 4 natural gas processing plant in July 2019 and additional NGLsvolumes received under percentage of proceeds contracts ~~resulting from lower NGLs commodity pricing.~~due to higher NGL prices, and the impact of adverse winter weather. Total offshore net production was lower in the first quarter of ~~2020 was comparable~~2021, compared to the ~~year-ago quarter.~~

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Consolidated Results~~corresponding period in 2020, primarily due to the sale of ~~Operations (continued)~~

~~International:~~ our working interest in the Shenzi Field in the deepwater Gulf of Mexico in the fourth quarter of 2020 and natural field decline. Net production atfrom the Shenzi Field was 12,000 boepd in the first quarter of 2020.

International: Net oil production in Guyana was higher in the first quarter of ~~2020,~~2021, compared to the ~~year-ago quarter,~~corresponding period in 2020, due to ~~commencement of~~the production ramp up from the Liza Phase 1 ~~development~~development. Net oil production in ~~December 2019. Net production at~~ Libya was lower due to production cessation in February 2020 following the declaration of force majeure by the Libyan National Oil Corporation caused by civil unrest. Net production was lower at Malaysia and JDA primarily due to lower nominations on reduced gas demand from COVID-19 restrictions.

~~Sales Volumes:The impact of~~ higher ~~sales volumes improved after-tax results by approximately $185 million~~ in the first quarter of ~~2020, compared~~2021 due to the ~~first quarter~~lifting of ~~2019.~~ force majeure in October 2020 and net natural gas production was higher at Malaysia and JDA reflecting higher natural gas nominations due to a recovery in economic activity.

PART I - FINANCIAL INFORMATION (CONT'D.)

Consolidated Results of Operations (continued)

Sales Volumes:Worldwide sales volumes from Hess net production, which excludes sales volumes of crude oil, NGLs and natural gas purchased from third parties, were as follows:

Three Months Ended

March 31,

2020

2019

(In thousands)

Crude oil – barrels

16,052

13,940

Natural gas liquids – barrels

5,097

3,631

Natural gas – mcf

55,620

51,435

Barrels of Oil Equivalent (a)

30,419

26,144

Crude oil – barrels per day

176

155

Natural gas liquids – barrels per day

56

40

Natural gas – mcf per day

611

572

Barrels of Oil Equivalent Per Day (a)

334

290

Three Months Ended
March 31,
2021 2020
(In thousands)
Crude oil – barrels (a) 20,395 16,052
Natural gas liquids – barrels 4,802 5,097
Natural gas – mcf 55,513 55,620
Barrels of Oil Equivalent (b) 34,449 30,419
Crude oil – barrels per day 227 176
Natural gas liquids – barrels per day 53 56
Natural gas – mcf per day 617 611
Barrels of Oil Equivalent Per Day (b) 383 334

(a)Sales volumes for the first quarter of 2021 include 4.2 million barrels that were stored on VLCCs at December 31, 2020.

~~(a)~~

Marketing, including ~~purchased oil~~Purchased Oil and ~~gas:~~Gas: Marketing expense is mainly comprised of costs to purchase crude oil, NGL and natural gas from our partners in Hess operated wells or other third parties, primarily in the U.S., and transportation and other distribution costs for U.S. marketing activities. Marketing expense was ~~lower~~higher in the first quarter of ~~2020,~~2021, compared with the corresponding period in ~~2019,~~2020, primarily due to ~~lower~~higher benchmark crude oil prices on purchased volumes ~~partially offset by higher purchased volumes~~ and ~~a $53~~the inclusion of $173 million ~~pre-tax charge~~ for the cost of the 4.2 million barrels of crude oil ~~inventory valuation.~~on VLCCs sold in the quarter.

Cash Operating Costs:Cash operating costs consist of operating costs and expenses, production and severance taxes and E&P general and administrative expenses. Cash operating costs ~~increased on an absolute basis and~~ decreased approximately five percent in the first quarter of 2021, compared with the first quarter of 2020, but were slightly higher on a ~~per barrel~~per-unit basis in the first quarter of ~~2020,~~2021, compared with the corresponding period in ~~2019,~~2020, primarily due to ~~a higher proportion~~the impact of ~~lower-cost~~lower production ~~from the Bakken.~~volumes.

Midstream Tariffs Expense: Tariffs expense increased ~~from 2019,~~in the first quarter of 2021, compared with the corresponding period in 2020, primarily due to higher ~~throughput volumes in 2020.~~minimum volume commitments and tariff rates. We estimate Midstream tariffs expense to be in the range of ~~$215~~$260 million ~~to $230~~and $270 million in the second quarter of 2021 and in the range of ~~$905~~$1,090 million ~~to $930~~and $1,115 million for the full year ~~2020.~~2021.

~~DD&A:~~

Depreciation, Depletion and Amortization (DD&A): DD&A ~~expenses~~expense and per unit rates were ~~higher in the first quarter of 2020 on an absolute basis, compared with the corresponding period in 2019, reflecting higher production volumes. DD&A expense on a per-unit basis was~~ lower in the first quarter of ~~2020,~~2021, compared with the ~~corresponding~~prior-year period ~~in 2019, primarily~~ due to the ~~year-over-year mix~~impact of ~~production.~~first quarter 2020 impairment charges and year-end 2020 revisions and additions to proved reserves. Lower first quarter 2021 production volumes also contributed to the decline in DD&A expense compared to the first quarter of 2020.

Unit Costs: Unit cost per ~~barrel of oil equivalent (boe)~~boe information is based on total net production volumes. Actual and forecast unit costs per boe are as follows:

Actual

Forecast range (a)

Three Months Ended

Three Months Ended

Twelve Months Ended

March 31,

June 30,

December 31,

2020

2019

2020

2020
Cash operating costs (b)

$
9.70

$
11.00

$10.00  — $10.50

$10.00  — $10.50
DD&A (c)

16.44

17.25

14.00  —  15.00

15.00  —  16.00
Total Production Unit Costs

$
26.14

$
28.25

$24.00 — $25.50

$25.00 — $26.50

~~(a)~~

~~Forecast information excludes any contribution from Libya.~~


	Actual				Forecast Range (a)
	Three Months Ended March 31,				Three Months Ended June 30,	Twelve Months Ended December 31,
	2021		2020		2021	2021
Cash operating costs (b)	$	9.81	$	9.70	$12.00 — $13.00	$11.00 — $12.00
DD&A (c)	11.83		16.44		11.50 — 12.50	12.00 — 13.00
Total Production Unit Costs	$	21.64	$	26.14	$23.50 — $25.50	$23.00 — $25.00

~~(b)~~(a)Forecast information excludes any contribution from Libya.

~~Cash operating costs per boe, excluding Libya, were $9.61 in the first quarter of 2020, compared to $11.54 in the first quarter of 2019.~~

~~(c)~~(b)Cash operating costs per boe, excluding Libya, were $10.21 in the first quarter of 2021, compared with $9.61 in the first quarter of 2020.

~~DD&A per boe, excluding Libya, was $16.64 in the first quarter of 2020, compared to $18.37 in the first quarter of 2019.~~

(c)DD&A per boe, excluding Libya, was $12.36 in the first quarter of 2021, compared with $16.64 in the first quarter of 2020.

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Consolidated Results of Operations (continued)

Exploration Expenses: Exploration expenses were as follows:

Three Months Ended

March 31,

2020

2019

(In millions)

Exploratory dry hole costs (a)

$
135

$
—

Exploration lease and other impairment (b)

32

7

Geological and geophysical expense and exploration overhead

22

27

Total Exploration Expense

$
189

$
34

~~(a)~~

First quarter 2020 primarily relates to previously capitalized exploratory wells (see Items Affecting Comparability of Earnings Between Periods below) and the Oldfield-1 exploration well in the Gulf of Mexico.


	Three Months Ended March 31,
	2021		2020

	(In millions)
Exploratory dry hole costs (a)	$	—	$	135
Exploration lease and other impairment (b)	4		32
Geological and geophysical expense and exploration overhead	29		22
Total Exploration Expense	$	33	$	189

~~(b)~~(a)First quarter 2020 primarily relates to previously capitalized exploratory well costs (see Items Affecting Comparability of Earnings Between Periods below) and the Oldfield-1 exploration well in the Gulf of Mexico.

~~First quarter 2020 includes impaired leasehold costs due to a reprioritization of the Corporation’s forward capital program.~~

(b)First quarter 2020 includes impaired leasehold costs due to a reprioritization of the Corporation’s forward capital program.

Exploration expenses, excluding dry hole expense, are estimated to be in the range of ~~$35~~$40 million to ~~$40~~$45 million in the second quarter of ~~2020~~2021 and ~~$145~~in the range of $170 million to ~~$155~~$180 million for the full year ~~of 2020.~~

2021.

Income Taxes: The ~~decline~~increase in income tax expense in the first quarter of ~~2020,~~2021, compared to the ~~year-ago quarter,~~corresponding period in 2020, is primarily due to ~~lower~~higher pre-tax income in ~~Libya as a result of the declaration of force majeure in January 2020.~~Guyana and Libya. Excluding items affecting comparability of earnings between periods and Libyan operations, E&P income tax expense in the first quarter of 2021 was $9$40 million, compared with ~~an expense of $2~~$9 million in the first quarter of ~~2019.~~ 2020. Excluding items affecting comparability of earnings between periods and Libyan operations, E&P income tax expense is expected ~~to be an expense~~ in the range of $5$25 million to ~~$10~~$30 million for the second quarter of ~~2020~~2021 and ~~$20~~$105 million to ~~$30~~$115 million for the full year ~~of 2020.~~2021.

Items Affecting Comparability of Earnings Between Periods:

The following table summarizes, on ~~a pre-tax and~~ an after-tax basis, income (expense) items affecting comparability of E&P earnings between periods:


	Three Months Ended											Three Months Ended March 31,
	March 31,											Pre-Tax				After-Tax
	Pre-tax					After-tax						2021		2020		2021		2020
	2020			2019		2020			2019
	(In millions)											(In millions)
Impairment	$	(2,126	)	$	—	$	(2,049	)	$	—	Impairment	$	—	$	(2,126)	$	—	$	(2,049)
Dry hole, lease impairment and other exploration expenses		(152	)		—		(150	)		—	Dry hole, lease impairment and other exploration expenses	—		(152)		—		(150)
Crude oil inventories write-down		(53	)		—		(52	)		—	Crude oil inventories write-down	—		(53)		—		(52)
	$	(2,331	)	$	—	$	(2,251	)	$	—		$	—	$	(2,331)	$	—	$	(2,251)

Impairment: In the first quarter of 2020, we recorded noncash impairment charges totaling $2.1 billion ($2.0 billion after income taxes) related to our oil and gas properties at North Malay Basin in Malaysia, the South Arne Field in Denmark, and the Stampede Field and the Tubular Bells Field in the Gulf of Mexico, primarily as a result of a lower long-term crude oil price outlook. Other charges totaling $21 million pre-tax ($20 million after income taxes) related to drilling rig right-of-use assets in the Bakken and surplus materials and supplies. See Note 2,7, Impairment in the Notes to Consolidated Financial Statements.

Dry hole, lease impairment and other exploration expenses: In the first quarter of 2020, we incurred pre-tax charges totaling $152 million ($150 million after income taxes), primarily related to the write-off of previously capitalized exploratory wells in the Gulf of Mexico ~~as detailed in~~ ~~Note 4, Property, plant and equipment~~ ~~in the~~ ~~Notes to Consolidated Financial Statements~~, and to impair certain exploration leasehold costs.

Crude oil inventories write-down: In the first quarter of 2020, we incurred a pre-tax charge of $53 million ($52 million after income taxes) to reduce crude oil inventories to their net realizable value. ~~These charges are included in~~ ~~Marketing, including purchased oil and gas~~

~~in the~~
~~Statement of Consolidated Income.~~ ~~See~~ ~~Note 3, Inventories~~ ~~in the~~ ~~Notes to Consolidated Financial Statements.~~

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Consolidated Results of Operations (continued)

Midstream

Following is a summarized income statement for our Midstream operations:


	Three Months Ended					Three Months Ended March 31,
	March 31,					2021		2020
	2020		2019
	(In millions)					(In millions)
Revenues and Non-Operating Income					Revenues and Non-Operating Income
Sales and other operating revenues	$	291	$	190	Sales and other operating revenues	$	289	$	291
Other, net		2		—	Other, net	3		2
Total revenues and non-operating income		293		190	Total revenues and non-operating income	292		293

Costs and Expenses					Costs and Expenses
Operating costs and expenses		92		55	Operating costs and expenses	60		92
General and administrative expenses		8		6	General and administrative expenses	7		8
Interest expense					Interest expense	23		25
Depreciation, depletion and amortization		38		34	Depreciation, depletion and amortization	40		38
Interest expense		25		15
Total costs and expenses		163		110	Total costs and expenses	130		163

Results of Operations Before Income Taxes		130		80	Results of Operations Before Income Taxes	162		130
Provision (benefit) for income taxes		2		—	Provision (benefit) for income taxes	3		2
Net Income (Loss)		128		80	Net Income (Loss)	159		128
Less: Net income (loss) attributable to noncontrolling interests		67		43	Less: Net income (loss) attributable to noncontrolling interests	84		67
Net Income (Loss) Attributable to Hess Corporation	$	61	$	37	Net Income (Loss) Attributable to Hess Corporation	$	75	$	61

Sales and other operating revenues ~~for~~were lower in the first quarter of ~~2020 increased,~~2021, compared to the ~~first quarter of 2019,~~corresponding period in 2020, primarily due to ~~higher throughput volumes and increased~~lower pass-through rail transportation ~~revenues associated with third-party services.~~revenue partially offset by higher minimum volume commitments and tariff rates. Operating costs and expenses for the first quarter of ~~2020 increased,~~2021 decreased, compared to the ~~first quarter of 2019,~~corresponding period in 2020, primarily due to ~~higher maintenance activity, and increased third-party rail~~lower pass-through transportation ~~charges.~~

~~The increase in interest expense from 2019 reflects higher borrowings by the Midstream business.~~

costs.

Excluding items affecting comparability of earnings, net income attributable to Hess Corporation from the Midstreamsegment is estimated to be in the range of ~~$40~~$60 million to ~~$50~~$70 million in the second quarter of ~~2020~~2021 and in the range of ~~$185~~ $280 million ~~to $195~~and $290 million for the full year ~~of 2020.~~

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Consolidated Results of Operations (continued)~~

2021.

Corporate, Interest and Other

The following table summarizes Corporate, Interest and Other expenses:

Three Months Ended

March 31,

2020

2019

(In millions)

Corporate and other expenses (excluding items affecting comparability)

$
39

$
32

Interest expense

88

90

Less: Capitalized interest

—

(7
)
Interest expense, net

88

83

Corporate, Interest and Other expenses before income taxes

127

115

Provision (benefit) for income taxes

(4
)

(1
)
Net Corporate, Interest and Other expenses after income taxes

123

114

Items affecting comparability of earnings between periods, after-tax

—

—

Total Corporate, Interest and Other Expenses After Income Taxes

$
123

$
114


	Three Months Ended March 31,
	2021		2020

	(In millions)
Corporate and other expenses	$	37	$	39


Interest expense	94		88
Corporate, Interest and Other expenses before income taxes	131		127
Provision (benefit) for income taxes	—		(4)


Total Corporate, Interest and Other Expenses After Income Taxes	$	131	$	123

Corporate and other expenses ~~were higher~~ in the first quarter of ~~2020, primarily due~~2021, were comparable to ~~a charge of $7 million for legal costs related to former downstream businesses.~~the corresponding period in 2020. Interest expense, net was higher in the first quarter of ~~2020,~~2021, compared to the ~~first quarter of 2019,~~corresponding period in 2020, due to interest incurred on the ~~cessation of capitalized interest at the Liza Field, offshore Guyana, upon commencement of production~~$1.0 billion three year term loan entered into in ~~December 2019.~~

March 2020.

Second quarter ~~2020~~2021 corporate expenses are expected to be in the range of ~~$25~~$30 million to ~~$30~~$35 million, and interest expense is expected to be in the range of $95 million to $100 million. We estimate corporate expenses for full year ~~2020~~2021 to be in the range of ~~$115~~$130 million to ~~$125~~$140 million, and interest expense to be in the range of ~~$375~~$380 million to ~~$385~~$390 million.

PART I - FINANCIAL INFORMATION (CONT'D.)

Consolidated Results of Operations (continued)

Other Items Potentially Affecting Future ~~Results~~

Results:

Our future results may be impacted by a variety of factors, including but not limited to, volatility in the selling prices of crude oil, NGLs and natural gas, reserve and production changes, asset sales, impairment charges and exploration expenses, industry cost inflation and/or deflation, changes in foreign exchange rates and income tax rates, changes in deferred tax asset valuation allowances, the effects of weather, crude oil storage capacity, political risk, environmental risk and catastrophic risk, including risks associated with COVID-19. For a more comprehensive description of the risks that may affect our business, see ~~the section entitled~~ Item1A. Risk Factors ~~in this Quarterly Report on Form 10-Q and in~~ ~~Item 1A. Risk Factors~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

Proved reserves are calculated using the average price during the twelve month period before December 31 determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within the year, unless prices are defined by contractual agreements, excluding escalations based on future conditions. Crude oil prices used in the determination of proved reserves at December 31, 2019 were $55.73 per barrel for WTI and $62.54 per barrel for Brent, which are significantly higher than crude oil prices at March 31, 2020 (WTI - $20.48 per barrel; Brent - $17.68 per barrel). If crude oil prices for the rest of 2020 remain significantly below prices used for proved reserves at December 31, 2019, proved reserves at December 31, 2020 could be significantly lower than proved reserves at December 31, 2019. It is difficult to estimate the magnitude of any net negative change in proved reserves that may result from lower crude oil prices due to a number of factors that are currently unknown, including 2020 crude oil prices, any revisions in proved reserves that may occur based on 2020 reservoir performance, the levels to which industry costs will decline in response to lower prices, and management’s plans as of December 31, 2020 for developing proved undeveloped reserves. Any changes in proved reserves will impact depreciation, depletion and amortization expense and the Standardized Measure of Discounted Future Net Cash Flows.

2020.

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

Liquidity and Capital Resources

The following table sets forth certain relevant measures of our liquidity and capital resources:

March 31,

December 31,

2020

2019

(In millions, except ratio)

Cash and cash equivalents (a)

$
2,080

$
1,545

Current maturities of long-term debt

3

—

Total debt (b)

8,194

7,142

Total equity

8,178

9,706

Debt to capitalization ratio as defined under debt covenants (c)

42.0
%

39.6
%

~~(a)~~

~~Includes $3 million of cash attributable to our Midstream segment, at March 31, 2020 (December 31, 2019: $3 million).~~


	March 31, 2021			December 31, 2020

	(In millions, except ratio)
Cash and cash equivalents (a)	$	1,866		$	1,739
Current maturities of long-term debt	13			10
Total debt (b)	8,286			8,296
Total equity	6,643			6,335
Debt to capitalization ratio (c)	46.6		%	47.5		%

~~(b)~~(a)Includes $4 million of cash attributable to our Midstream segment at March 31, 2021 (December 31, 2020: $4 million) of which, $2 million is held by Hess Midstream LP at March 31, 2021 (December 31, 2020: $3 million).

~~At March 31, 2020, includes $1,815 million of debt outstanding from our Midstream Segment (December 31, 2019: $1,753 million) that is non-recourse to Hess Corporation.~~

~~(c)~~(b)At March 31, 2021, includes $1,899 million of debt outstanding from our Midstream segment (December 31, 2020: $1,910 million) that is non-recourse to Hess Corporation.

Total debt (including finance lease obligations) as a percentage of the sum of total debt (including finance lease obligations) plus equity (excluding impact of noncash impairment charges) as defined under debt covenants.

(c)Total Consolidated Debt of Hess Corporation (including finance leases and excluding Midstream non-recourse debt) as a percentage of Total Capitalization of Hess Corporation as defined under Hess Corporation's term loan and revolving credit facility financial covenants. Total Capitalization excludes the impact of noncash impairment charges and non-controlling interests.

Cash Flows

The following table summarizes our cash flows:


	Three Months Ended							Three Months Ended March 31,
	March 31,							2021		2020
	2020			2019
	(In millions)							(In millions)
Net cash provided by (used in):							Net cash provided by (used in):
Operating activities	$	445		$	238		Operating activities	$	591	$	445
Investing activities		(818	)		(680	)	Investing activities	(385)		(818)
Financing activities		908			48		Financing activities	(79)		908
Net Increase (Decrease) in Cash and Cash Equivalents	$	535		$	(394	)	Net Increase (Decrease) in Cash and Cash Equivalents	$	127	$	535

Operating activities: Net cash provided by operating activities was $591 million in the first quarter of 2021, compared to $445 million in the first quarter of ~~2020, compared to $238~~2020. The increase in 2021 operating cash flows primarily reflects higher realized selling prices and the sale of 4.2 million barrels of Bakken crude oil loaded on two VLCCs in the first quarter of ~~2019.~~2021. Changes in operating assets and liabilities was a use of cash of $224 million in the first quarter of 2021, and a use of cash of $57 million in the first quarter of ~~2020,~~2020. Changes in operating assets and liabilities in 2021 were primarily due to an increase in accounts receivable and a ~~use of cash of $397 million~~reduction in the first quarter of 2019, which included a one-time payment of approximately $130 million to our joint venture partner for its share of sale/leaseback proceeds related to our sale of the North Malay Basin floating storage and offloading vessel that we received in 2018.accounts payable.

Investing activities: Additions to property, plant and equipment of ~~$818~~$385 million in the first quarter of ~~2020~~2021 were ~~up $147~~down $433 million compared with the corresponding period in ~~2019.~~2020. The ~~increase~~decrease primarily reflects ~~higher activity in the Bakken~~reduced drilling activity.

PART I - FINANCIAL INFORMATION (CONT'D.)

Liquidity and Gulf of Mexico and first quarter payments on accrued fourth quarter 2019 capital expenditures. The first quarter of 2019 included Midstream additions of approximately $90 million associated with the Summit acquisition.

Capital Resources (continued)

The following table reconciles capital expenditures incurred on an accrual basis to Additions to property, plant and equipment:


	Three Months Ended							Three Months Ended March 31,
	March 31,							2021		2020
	2020			2019
	(In millions)							(In millions)
Additions to property, plant and equipment - E&P:							Additions to property, plant and equipment - E&P:
Capital expenditures incurred - E&P	$	(609	)	$	(515	)	Capital expenditures incurred - E&P	$	(280)	$	(609)
Increase (decrease) in related liabilities		(131	)		(6	)	Increase (decrease) in related liabilities	(78)		(131)
Additions to property, plant and equipment - E&P	$	(740	)	$	(521	)	Additions to property, plant and equipment - E&P	$	(358)	$	(740)

Additions to property, plant and equipment - Midstream:							Additions to property, plant and equipment - Midstream:
Capital expenditures incurred - Midstream	$	(57	)	$	(127	)	Capital expenditures incurred - Midstream	$	(23)	$	(57)
Increase (decrease) in related liabilities		(21	)		(23	)	Increase (decrease) in related liabilities	(4)		(21)
Additions to property, plant and equipment - Midstream	$	(78	)	$	(150	)	Additions to property, plant and equipment - Midstream	$	(27)	$	(78)

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Liquidity and Capital Resources (continued)~~

Financing activities: ~~Borrowings in the first quarter of 2020 include $1.0 billion related to our new three-year term loan.~~ Hess Midstream ~~borrowed~~repaid a net total of ~~$60~~$10 million from ~~their~~its revolving credit facilities in the first quarter of ~~2020~~2021 and ~~$199~~borrowed a net total of $60 million in the first quarter of ~~2019.~~2020. Borrowings in the first quarter of 2020 also included our $1.0 billion three year term loan. We paid common stock dividends totaling $80 million in the first quarter of 2021, compared to $81 million in the first quarter of ~~2020, compared to common stock and preferred dividends of $88 million in the first quarter of 2019.~~2020. In addition, net cash outflows to noncontrolling interests were $67 million in the first quarter of 2021 and $63 million in the first quarter of ~~2020 and $13 million in~~2020. In the first quarter of ~~2019.~~2021, we received net proceeds of $70 million from the public offering of 3,450,000 Hess-owned Class A shares in Hess Midstream LP.

Future Capital Requirements and Resources

At March 31, ~~2020,~~ 2021, we had ~~$2.1~~ $1.86 billion in cash and cash equivalents, excluding Midstream, and total liquidity ~~including available committed credit facilities,~~ of approximately ~~$5.9~~ $5.5 billion. ~~Our~~On April 13, 2021, we amended the Corporation's fully undrawn $3.5 billion ~~committed~~ revolving credit facility ~~matures in~~by extending the facility's expiration date for one year to May ~~2023, and we have no significant near-term debt maturities aside from the new term loan in March 2023.~~ 2024. Oil and gas production in ~~2020,~~2021, excluding Libya, is forecast to be ~~approximately 320,000~~in the range of 290,000 boepd. We to 295,000 boepd. For the remainder of 2021, we have ~~more than 80% of our remaining crude oil production in 2020~~ hedged 120,000 bopd with $55 WTI put options ~~for 130,000~~and 30,000 bopd ~~and~~with $60 Brent put ~~options~~options.

On April 30, 2021, we completed the sale of our previously announced Little Knife and Murphy Creek nonstrategic acreage interests in the Bakken for ~~20,000 bopd.~~

total consideration of $312 million, with an effective date of March 1, 2021, and expect to receive proceeds in the third quarter of 2021 from the sale of our interests in Denmark for total consideration of $150 million, with an effective date of January 1, 2021.

Net cash provided by operating activities was $591 million in the first quarter of 2021, compared with $445 million in the first quarter of ~~2020, compared with $238 million in the first quarter of 2019.~~2020. Net cash provided by operating activities before changes in operating assets and liabilities was $815 million in the first quarter of 2021 and $502 million in the first quarter of ~~2020 and $635~~2020. Capital expenditures were $303 million in the first quarter of ~~2019. Capital expenditures were~~2021 and $666 million in the first quarter of ~~2020 and $642 million in the first quarter of 2019.~~ 2020. In ~~2020,~~2021, based on current forward strip crude oil prices, we expect cash flow from operating activities, ~~including settlements~~expected proceeds from ~~crude oil put option contracts,~~asset sales, and cash and cash equivalents ~~existing~~ at March 31, ~~2020, and our available committed revolving credit facility~~2021 will be sufficient to fund our capital investment program and dividends. ~~Due to the weak commodity price environment, we~~We may take any of the following steps, or a combination thereof, to improve our liquidity and financial position: ~~further~~ reduce the planned capital program and other cash outlays, including dividends, pursue asset sales, borrow against our committed revolving credit facility, or issue debt or equity ~~securities,~~securities.

PART I - FINANCIAL INFORMATION (CONT'D.)

Liquidity and ~~pursue asset sales.~~

Capital Resources (continued)

The table below summarizes the capacity, usage, and available capacity for borrowings and letters of credit under committed and uncommitted credit facilities at March 31, ~~2020:~~

Letters of

Expiration

Credit

Total

Available

Date

Capacity

Borrowings

Issued

Used

Capacity

(In millions)

Hess Corporation

Revolving credit facility

May 2023

$
3,500

$
—

$
—

$
—

$
3,500

Committed lines

Various (a)

345

—

54

54

291

Uncommitted lines

Various (a)

205

—

205

205

—

Total - Hess Corporation

$
4,050

$
—

$
259

$
259

$
3,791

Midstream

Revolving credit facility (b)

December 2024

$
1,000

$
92

$
—

$
92

$
908

Total - Midstream

$
1,000

$
92

$
—

$
92

$
908

2021:

~~(a)~~

~~Committed and uncommitted lines have expiration dates through 2020.~~


	Expiration Date	Capacity		Borrowings		Letters of Credit Issued		Total Used		Available Capacity

		(In millions)
Hess Corporation
Revolving credit facility	May, 2023	$	3,500	$	—	$	—	$	—	$	3,500
Committed lines	Various (a)	175		—		54		54		121
Uncommitted lines	Various (a)	229		—		229		229		—
Total - Hess Corporation		$	3,904	$	—	$	283	$	283	$	3,621
Midstream
Revolving credit facility (b)	December, 2024	$	1,000	$	174	$	—	$	174	$	826
Total - Midstream		$	1,000	$	174	$	—	$	174	$	826

~~(b)~~(a)Committed and uncommitted lines have expiration dates through 2021.

~~This credit facility~~ ~~may only be utilized by HESM Opco and is non-recourse to Hess Corporation.~~

(b)This credit facility may only be utilized by HESM Opco and is non-recourse to Hess Corporation.

Hess Corporation:

On April 13, 2021, we amended the Corporation's fully undrawn $3.5 billion revolving credit facility that had an expiration date in May 2023, by extending the facility for one year to May 2024 and incorporating customary provisions for the eventual replacement of LIBOR, among other changes as set forth in the amended credit agreement. This facility can be used for borrowings and letters of credit. Borrowings on the facility will generally bear interest at 1.40% above LIBOR, though the interest rate is subject to adjustment if the Corporation’s credit rating changes. At March 31, 2021, Hess Corporation had no outstanding borrowings or letters of credit under its revolving credit facility.

In ~~the first quarter of~~March 2020, ~~the Corporation~~we entered into a ~~$1.0~~$1 billion three year term loan agreement ~~with JPMorgan Chase Bank N.A.~~ with a maturity date of March 16, 2023. ~~The term loan agreement contains provisions that require us to reduce JPMorgan’s initial funded amount of $1.0 billion. The Corporation is currently in the process of syndicating with other lenders.~~ Borrowings under the term loan generally bear interest at ~~the~~LIBOR plus an applicable ~~interest rates either, at the Corporation’s option, the adjusted LIBOR rate in effect from time to time or the alternate base rate (as described in~~margin of 2.25% until the term ~~loan agreement) plus the~~loan's first anniversary. The applicable ~~margins specified in the term loan agreement, which generally vary~~margin varies based on the credit rating of the Corporation’s senior unsecured ~~non-credit enhanced~~ long-term ~~debt. This loan has been classified as noncurrent in~~debt and will increase by 0.25% on each anniversary of the consolidated balance sheet due to the Corporation’s ability and intent to refinance any amount we are unable to syndicate to other banks on a long-term basis through the Corporation’s existing $3.5 billionterm loan.

The revolving credit facility, ~~with a maturity date of May 15, 2023. The~~including as amended, and term loan ~~agreement contains~~are subject to customary representations, warranties, customary events of default and covenants, including a financial covenant limiting the ratio of Total Consolidated Debt to Total Capitalization ~~(as such terms are defined in the term loan agreement)~~ of the Corporation and its consolidated subsidiaries to 65%, and ~~customary events~~a financial covenant limiting the ratio of ~~default.~~secured debt to Consolidated Net Tangible Assets of the Corporation and its consolidated subsidiaries to 15% (as these capitalized terms are defined in the credit agreement for the revolving credit facility and the term loan agreement). The indentures for the Corporation's fixed-rate public notes limit the ratio of secured debt to Consolidated Net Tangible Assets (as that term is defined in the indentures) to 15%. At March 31, ~~2020,~~2021, Hess Corporation ~~had borrowings of $1.0 billion under this term loan agreement and~~ was in compliance with ~~this~~these financial ~~covenant.~~

~~At March 31, 2020, Hess Corporation had no outstanding borrowings or letters of credit under its revolving credit facility and was in compliance with its financial~~ covenants.

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Liquidity and Capital Resources (continued)~~

Two of the three major credit rating agencies that rate our debt have assigned an investment grade rating. In March ~~2020,~~2021, Standard and Poor’s Ratings Services affirmed our credit rating at BBB- and revised the outlook to ~~negative~~stable (from ~~stable) while~~negative). Fitch Ratings ~~assigned~~affirmed a ~~BBB- rating to the $1.0 billion term loan, with no change to our~~ BBB- credit rating and stable ~~outlook. In March~~outlook in August 2020 and Moody’s Investors Service affirmed our credit rating at Ba1 with stable outlook, which is below investment ~~grade.~~

grade, in March 2020.

We have a shelf registration under which we may issue additional debt securities, warrants, common stock or preferred stock.

Midstream:

At March 31, ~~2020,~~2021, Hess Midstream Operations LP (formerly Hess Midstream Partners LP, or HESM Opco), a consolidated subsidiary of Hess Midstream LP, had $1.4 billion of senior secured syndicated credit facilities maturing December 16, 2024, consisting of a $1.0 billion 5-year revolving credit facility and a fully drawn $400 million 5-year term loan A facility. The revolving credit facility can be used for borrowings and letters of credit to fund HESM Opco’s operating activities, capital expenditures, distributions and for other general corporate purposes. Borrowings under the ~~5-year~~five year term loan A facility will generally bear interest at LIBOR plus an applicable margin ranging from 1.55% to 2.50%, while the applicable margin for the ~~5-year~~five year syndicated revolving credit facility ranges from 1.275% to 2.000%. Pricing levels for the facility fee and interest-rate margins are based on HESM Opco’s ratio of total debt to EBITDA (as defined in the credit facilities). If HESM Opco obtains an investment grade credit rating, the pricing levels will be based on HESM Opco’s credit ratings in effect from time to time. The credit facilities contain covenants that require

PART I - FINANCIAL INFORMATION (CONT'D.)

Liquidity and Capital Resources (continued)

HESM Opco to maintain a ratio of total debt to EBITDA (as defined in the credit facilities) for the prior four fiscal quarters of not greater than 5.00 to 1.00 as of the last day of each fiscal quarter (5.50 to 1.00 during the specified period following certain acquisitions) and, prior to HESM Opco obtaining an investment grade credit rating, a ratio of secured debt to EBITDA for the prior four fiscal quarters of not greater than 4.00 to 1.00 as of the last day of each fiscal quarter. HESM Opco was in compliance with these financial covenants at March 31, ~~2020.~~2021. The credit facilities are secured by first-priority perfected liens on substantially all the presently owned and after-acquired assets of HESM Opco and its direct and indirect wholly owned material domestic subsidiaries, including equity interests directly owned by such entities, subject to certain customary exclusions. At March 31, ~~2020,~~2021, borrowings of ~~$92~~$174 million were drawn under HESM Opco’s revolving credit facility, and borrowings of ~~$400~~$398 million, excluding deferred issuance costs, were drawn under HESM Opco’s term loan A facility. Borrowings under these credit facilities are non-recourse to Hess Corporation.

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

Market Risk Disclosures

We are exposed in the normal course of business to commodity risks related to changes in the prices of crude oil and natural gas, as well as changes in interest rates and foreign currency values. SeeNote 12, Financial Risk Management Activities, in the Notes to Consolidated Financial Statements.

We have outstanding foreign exchange contracts with notional amounts totaling ~~$65~~$121 million at March 31, ~~2020~~2021 that are used to reduce our exposure to fluctuating foreign exchange rates for various currencies. ~~The change in fair value of foreign exchange contracts from a~~A 10% strengthening or weakening in the U.S. Dollar exchange rate is estimated to be a loss or gain of less than $5 million, respectively, at March 31, ~~2020.~~

2021.

At March 31, ~~2020,~~2021, our total long-term debt, which was substantially comprised of fixed-rate instruments, had a carrying value of ~~$8,194~~$8,286 million and a fair value of ~~$6,468~~$9,381 million. A 15% increase or decrease in interest rates would decrease or increase the fair value of debt by approximately ~~$500~~$405 million or ~~$590~~$420 million, respectively. Any changes in interest rates do not impact our cash outflows associated with fixed-rate interest payments or settlement of debt principal, unless a debt instrument is repurchased prior to maturity.

At March 31, ~~2020,~~2021, we have outstanding WTI and Brent crude oil put option contracts. As of March 31, ~~2020,~~2021, an assumed 10% increase in the forward WTI and Brent crude oil prices ~~used in determining the fair value of our put options~~ would reduce the fair value of these derivative instruments by approximately ~~$115~~$50 million, while an assumed 10% decrease in the same crude oil prices would increase the fair value of these derivative instruments by approximately ~~$125~~$110 million.

PART I - FINANCIAL INFORMATION (CONT'D.)

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including information incorporated by reference herein,contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation: our future financial and operational results; our business strategy; estimates of our crude oil and natural gas reserves and levels of production; benchmark prices of crude oil, ~~natural gas liquids~~NGL and natural gas and our associated realized price differentials; our projected budget and capital and exploratory expenditures; ~~our plan to syndicate the $1 billion term loan;~~ expected timing and completion of our development ~~projects;~~projects and proposed asset sale; and future economic and market conditions in the oil and gas industry.

Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements:

•

fluctuations in market prices of crude oil, natural gas liquids and natural gas and competition in the oil and gas exploration and production industry, including as a result of the global COVID-19 pandemic;

•

~~potential disruption or interruption~~•fluctuations in market prices of crude oil, NGL and natural gas and competition in the oil and gas exploration and production industry, including as a result of ~~our operations due to catastrophic events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks or health measures related to~~ COVID-19;

•reduced demand for our products, including due to COVID-19 or the outbreak of any other public health threat, or due to the impact of competing or alternative energy products and political conditions and events;

reduced demand for our products, including due to the global COVID-19 pandemic or the outbreak of any other public health threat, or due to the impact of competing or alternative energy products and political conditions and events, such as instability, changes in governments, armed conflict and economic sanctions;

•potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels;

~~potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions;~~

•changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring as well as fracking bans;

~~potential failures or delays in achieving expected production levels given inherent uncertainties in estimating quantities of proved reserves;~~

•disruption or interruption of our operations due to catastrophic events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks or health measures related to COVID-19;

changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and well fracking bans;

•

the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures under which we may not control;

•the ability to satisfy the closing conditions of the proposed asset sale;

~~unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits;~~

•unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits;

~~availability and costs of employees and other personnel, drilling rigs, equipment, supplies and other required services;~~

~~PART I - FINANCIAL INFORMATION (CONT’D.)~~

~~Cautionary Note Regarding Forward-Looking Statements (continued)~~

•

any limitations on our access to capital or increase in our cost of capital, including our ability to fully syndicate the term loan, as a result of weakness in the oil and gas industry or negative outcomes within commodity and financial markets;

•availability and costs of employees and other personnel, drilling rigs, equipment, supplies and other required services;

~~liability resulting from litigation, including heightened risks associated with being a general partner of Hess Midstream LP; and~~

•any limitations on our access to capital or increase in our cost of capital, including as a result of weakness in the oil and gas industry or negative outcomes within commodity and financial markets;

~~other factors described in the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and in~~ ~~Item 1A—Risk Factors~~ ~~in our Annual Report on Form 10-K for the year ended December 31, 2019 as well as any additional risks described in our other filings with the SEC.~~

•liability resulting from litigation, including heightened risks associated with being a general partner of Hess Midstream LP; and

•other factors described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 as well as any additional risks described in our other filings with the SEC.

As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

PART I - FINANCIAL INFORMATION ~~(CONT’D.~~(CONT'D.)

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The information required by this item is presented under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Risk Disclosures.”

Item 4. Controls and Procedures.

Based upon their evaluation of the Corporation’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, ~~2020,~~2021, John B. Hess, Chief Executive Officer, and John P. Rielly, Chief Financial Officer, concluded that these disclosure controls and procedures were effective as of March 31, ~~2020.~~

2021.

There was no change in internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 in the quarter ended March 31, ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is contained in Note 10, Guarantees and Contingencies in the Notes to Consolidated Financial Statements and is incorporated herein by reference.

~~Item 1A. Risk Factors.~~

~~Part I, Item 1A. Risk Factors~~

in our Annual Report on Form 10-K for the year ended December 31, 2019, includes certain risk factors that could materially affect our business, financial condition, or future results. Those risk factors have not materially changed, except as set forth and as supplemented below:

Our business and operations have been and may continue to be adversely affected by the COVID-19 global pandemic or other similar public health developments and the recent reduced demand for oil and natural gas.

The COVID-19 global pandemic and related actions taken by governments and businesses, including voluntary and mandatory quarantines and travel and other restrictions, has resulted in a significant and swift reduction in economic activity. As a result of the COVID-19 pandemic, our operations, and those of our business partners, service companies and suppliers, have experienced and may continue to experience adverse effects, including disruptions, delays or temporary suspensions of operations and supply chains; temporary inaccessibility or closures of facilities; and workforce impacts from illness, school closures and other community response measures. We have implemented a variety of health and safety measures including enhanced cleaning procedures and modified work practices such as travel restrictions, health screenings, reduced personnel at offshore platforms and onshore work sites wherever this can be done safely, and remote working arrangements for office workers. To the extent we or our business partners, service companies or suppliers continue to experience restrictions or other effects, our financial condition, results of operations and future expansion projects may be adversely affected.

The timeline and potential magnitude of the COVID-19 pandemic is currently unknown. In addition to the global health concerns of COVID-19, the pandemic has negatively affected the United States and global economy and severely adversely impacted demand for oil and natural gas. The continuation or amplification of the outbreak of COVID-19 could result in further economic downturn that may affect our operating results in the long-term. In addition, the effects of COVID-19 and concerns regarding its global spread have negatively impacted the domestic and international demand for crude oil and natural gas, which has contributed to price volatility and adversely affected the demand for and marketability of crude oil, natural gas and NGLs, and resulting increased demand for commercial storage which could require further curtailments and shut-ins of production by the industry. In the event one or more of our business partners is adversely affected by COVID-19 or the current market environment, that may impact our costs and ability to conduct business with them. In addition, we may face an increased risk of changes in the regulation related to our business, such as the imposition of limitations on the production of oil and gas by states or other jurisdictions, that may result in additional limits on our products. We also are subject to litigation risk and possible loss contingencies related to COVID-19, including with respect to commercial contracts, employee matters and insurance arrangements. We may face additional asset impairments, decreases in proved reserves, along with other accounting charges as demand for crude oil, natural gas and NGLs decreases. The current environment may make it more difficult to syndicate our term loan and comply with our covenants and other restrictions in agreements governing our debt, and a lack of confidence in our industry on the part of the financial markets may result in a lack of access to capital, any of which could lead to reduced liquidity.

As the potential impact from the COVID-19 pandemic is difficult to predict, the extent to which it may negatively affect our operating results is uncertain. Any impact will depend on future developments and new information that may emerge regarding the severity and duration of COVID-19 and the actions taken by authorities to contain it or treat its impact, all of which are beyond our control. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in our annual report on Form 10-K for the year ended December 31, 2019.

PART II – OTHER INFORMATION ~~(CONT’D.)~~

~~Item 2. Share Repurchase Activities.~~

~~Our common share repurchase activities for the three months ended March 31, 2020, were as follows:~~

Period

Total Number of Shares Purchased (a)

Average Price Paid
per Share (b)

Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Maximum Approximate Dollar Value of Shares that
May Yet be Purchased Under the Plans or Programs (c)
(In millions)

January

—

$
—

—

$
650

February

—

—

—

650

March

35,202

32.34

—

650

Total

35,202

$
32.34

—

(CONT'D)

~~(a)~~

Represents common shares repurchased at a price of $32.32 per common share on the open market, of which substantially all were granted to Directors in accordance with the Non-Employee Directors’ Stock Plan.

~~(b)~~

~~The average price paid per share was inclusive of transaction fees.~~

~~(c)~~

In March 2013, we announced that our Board of Directors approved a stock repurchase program that authorized the purchase of common stock up to a value of $4.0 billion. In May 2014, the share repurchase program was increased to $6.5 billion and in March 2018, it was increased further to $7.5 billion.

~~Item 5. Other Information.~~

On May 6, 2020, the Board of Directors of the Corporation approved and adopted amendments to the Corporation’s By-Laws (as amended, the By-Laws), to help facilitate the conduct of a virtual annual meeting of stockholders in 2020 as a result of the COVID-19 pandemic.

Article III, Section 1 of the By-Laws was amended to clarify that the Corporation’s meetings of stockholders may be held by means of remote communications and to permit appropriate arrangements relevant to such a meeting, including without limitation, arrangements as to format, procedures and notices, in accordance with applicable law.

The foregoing summary description of the amendments to the By-Laws is subject to, and qualified in its entirety by reference to, the full text of the amended By-Laws, filed as Exhibit 3(1) hereto and incorporated herein by reference.

~~PART II – OTHER INFORMATION (CONT’D.)~~

Item 6. Exhibits.

	~~Exhibits~~
Exhibits			3(1)*	~~By-Laws of Hess Corporation (as amended effective May 6, 2020).~~
4(1)			10(1)*	~~Form of Restricted Stock Award Agreement under the 2017 Long-Term Incentive Plan.~~
	10(2)*	~~Form of Stock Option Award Agreement under the 2017 Long-Term Incentive Plan.~~
	10(3)*	~~Form of Performance Award Agreement for three-year period ending December 31, 2022 under the 2017 Long-Term Incentive Plan.~~
	~~10(4)~~	~~Loan~~Extension and Amendment Agreement, dated as of ~~March 16, 2020,~~April 13, 2021, among Hess Corporation, the subsidiary party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent incorporated by reference to Exhibit 10(1) of Form 8-K of the ~~registrant,~~Registrant, filed on ~~March 17, 2020.~~April 13, 2021.
10(1)*		Form of Performance Award Agreement for three-year period ending December 31, 2023 under the 2017 Long-Term Incentive Plan.
31(1)		~~31(1)~~	Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)).
31(2)			~~31(2)~~	Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a) (17 CFR 240.15d-14(a)).
32(1)			~~32(1)~~	Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
32(2)			~~32(2)~~	Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
101(INS)			101(INS)*	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101(SCH)			101(SCH)*	Inline XBRL Taxonomy Extension Schema Document.
101(CAL)			101(CAL)*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101(LAB)			101(LAB)*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101(PRE)			101(PRE)*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101(DEF)			101(DEF)*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
104			~~104~~	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2020,~~2021, has been formatted in Inline XBRL.

* ~~These exhibits relate~~The exhibit relates to executive compensation plans and arrangements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~HESS CORPORATION~~
~~(REGISTRANT)~~ HESS CORPORATION
		(REGISTRANT)

By
By	/s/ John B. Hess
	JOHN B. HESS
	CHIEF EXECUTIVE OFFICER


By	/s/ John P. Rielly
	JOHN P. RIELLY
	~~SENIOR~~EXECUTIVE VICE PRESIDENT AND
	CHIEF FINANCIAL OFFICER

~~Date~~:

Date: May ~~7, 2020~~6, 2021

	March 31,		December 31,
	2020		2019				March 31, 2021		December 31, 2020
	(In millions,
	except share amounts)						(In millions, except share amounts)
Assets						Assets
Current Assets:						Current Assets:
Cash and cash equivalents	$	2,080	$	1,545		Cash and cash equivalents	$	1,866	$	1,739
Accounts receivable:						Accounts receivable:
From contracts with customers		600		940		From contracts with customers	860		710
Joint venture and other		194		230		Joint venture and other	151		150
Crude oil derivative contracts		1,098		125
Inventories		230		261		Inventories	219		378
Assets held for sale						Assets held for sale	229		0
Other current assets		68		55		Other current assets	197		104
Total current assets		4,270		3,156		Total current assets	3,522		3,081
Property, plant and equipment:						Property, plant and equipment:
Total — at cost		31,704		35,820		Total — at cost	30,642		30,519
Less: Reserves for depreciation, depletion, amortization and lease impairment		16,893		19,006		Less: Reserves for depreciation, depletion, amortization and lease impairment	16,779		16,404
Property, plant and equipment — net		14,811		16,814		Property, plant and equipment — net	13,863		14,115
Operating lease right-of-use assets — net		386		447		Operating lease right-of-use assets — net	386		426
Finance lease right-of-use assets — net		187		299		Finance lease right-of-use assets — net	161		168
Goodwill		360		360		Goodwill	360		360
Deferred income taxes		77		80		Deferred income taxes	41		59
Other assets		626		626		Other assets	618		612
Total Assets	$	20,717	$	21,782		Total Assets	$	18,951	$	18,821
Liabilities						Liabilities
Current Liabilities:						Current Liabilities:
Accounts payable	$	431	$	411		Accounts payable	$	172	$	200
Accrued liabilities		1,334		1,803		Accrued liabilities	1,254		1,251
Taxes payable		33		97		Taxes payable	168		81
Current maturities of long-term debt		3		—		Current maturities of long-term debt	13		10
Current portion of operating and finance lease obligations		146		199		Current portion of operating and finance lease obligations	83		81
Total current liabilities		1,947		2,510		Total current liabilities	1,690		1,623
Long-term debt		8,191		7,142		Long-term debt	8,273		8,286
Long-term operating lease obligations		357		353		Long-term operating lease obligations	437		478
Long-term finance lease obligations		233		238		Long-term finance lease obligations	215		220
Deferred income taxes		328		415		Deferred income taxes	324		342
Asset retirement obligations		929		897		Asset retirement obligations	758		894
Other liabilities and deferred credits		554		521		Other liabilities and deferred credits	611		643
Total Liabilities		12,539		12,076		Total Liabilities	12,308		12,486
Equity						Equity
Hess Corporation stockholders’ equity:						Hess Corporation stockholders’ equity:
Common stock, par value $1.00; Authorized — 600,000,000 shares						Common stock, par value $1.00; Authorized — 600,000,000 shares
Issued — 307,158,340 shares (2019: 304,955,472)		307		305
Issued — 308,436,780 shares (2020: 306,980,092)						Issued — 308,436,780 shares (2020: 306,980,092)	308		307
Capital in excess of par value		5,633		5,591		Capital in excess of par value	5,779		5,684
Retained earnings		1,021		3,535		Retained earnings	305		130
Accumulated other comprehensive income (loss)		239		(699	)	Accumulated other comprehensive income (loss)	(776)		(755)
Total Hess Corporation stockholders’ equity		7,200		8,732		Total Hess Corporation stockholders’ equity	5,616		5,366
Noncontrolling interests		978		974		Noncontrolling interests	1,027		969
Total equity		8,178		9,706
Total Equity						Total Equity	6,643		6,335
Total Liabilities and Equity	$	20,717	$	21,782		Total Liabilities and Equity	$	18,951	$	18,821


	Three Months Ended							Three Months Ended March 31,
	March 31,							2021		2020
	2020			2019
	(In millions)							(In millions)

Net Income (Loss)	$	(2,366	)	$	75		Net Income (Loss)	$	336	$	(2,366)

Other Comprehensive Income (Loss):							Other Comprehensive Income (Loss):

Derivatives designated as cash flow hedges							Derivatives designated as cash flow hedges
Effect of hedge (gains) losses reclassified to income		(64	)		(15	)	Effect of hedge (gains) losses reclassified to income	51		(64)
Income taxes on effect of hedge (gains) losses reclassified to income		—			—		Income taxes on effect of hedge (gains) losses reclassified to income	0		0
Net effect of hedge (gains) losses reclassified to income		(64	)		(15	)	Net effect of hedge (gains) losses reclassified to income	51		(64)
Change in fair value of cash flow hedges		990			(346	)	Change in fair value of cash flow hedges	(102)		990
Income taxes on change in fair value of cash flow hedges		—			—		Income taxes on change in fair value of cash flow hedges	0		0
Net change in fair value of cash flow hedges		990			(346	)	Net change in fair value of cash flow hedges	(102)		990
Change in derivatives designated as cash flow hedges, after taxes		926			(361	)	Change in derivatives designated as cash flow hedges, after taxes	(51)		926

Pension and other postretirement plans							Pension and other postretirement plans
(Increase) reduction in unrecognized actuarial losses		—			6		(Increase) reduction in unrecognized actuarial losses	14		0
Income taxes on actuarial changes in plan liabilities		—			—		Income taxes on actuarial changes in plan liabilities	0		0
(Increase) reduction in unrecognized actuarial losses, net		—			6		(Increase) reduction in unrecognized actuarial losses, net	14		0
Amortization of net actuarial losses		12			11		Amortization of net actuarial losses	16		12
Income taxes on amortization of net actuarial losses		—			—		Income taxes on amortization of net actuarial losses	0		0
Net effect of amortization of net actuarial losses		12			11		Net effect of amortization of net actuarial losses	16		12
Change in pension and other postretirement plans, after taxes		12			17		Change in pension and other postretirement plans, after taxes	30		12
Other Comprehensive Income (Loss)		938			(344	)	Other Comprehensive Income (Loss)	(21)		938

Comprehensive Income (Loss)		(1,428	)		(269	)	Comprehensive Income (Loss)	315		(1,428)
Less: Comprehensive income (loss) attributable to noncontrolling interests		67			43		Less: Comprehensive income (loss) attributable to noncontrolling interests	84		67
Comprehensive Income (Loss) Attributable to Hess Corporation	$	(1,495	)	$	(312	)	Comprehensive Income (Loss) Attributable to Hess Corporation	$	231	$	(1,495)

☐
☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Item No.		Page Number
	PART I - FINANCIAL INFORMATION
1.	Financial Statements (Unaudited)
	Consolidated Balance Sheet at March 31, 2020, and December 31, 2019	2
	Statement of Consolidated Income for the Three Months Ended March 31, 2020, and 2019	3
	Statement of Consolidated Comprehensive Income for the Three Months Ended March 31, 2020, and 2019	4
	Statement of Consolidated Cash Flows for the Three Months Ended March 31, 2020, and 2019	5
	Statement of Consolidated Equity for the Three Months Ended March 31, 2020, and 2019	6
	Notes to Consolidated Financial Statements (Unaudited)	7
	Note 1 - Basis of Presentation	7
	Note 2 - Impairment	7
	Note 3 - Inventories	7
	Note 4 – Property Plant and Equipment	8
	Note 5 - Hess Midstream LP	8
	Note 6 - Debt	8
	Note 7 - Retirement Plans	9
	Note 8 - Revenue	9
	Note 9 - Weighted Average Common Shares	10
	Note 10 - Guarantees and Contingencies	10
	Note 11 - Segment Information	12
	Note 12 - Financial Risk Management Activities	12

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
3.	Quantitative and Qualitative Disclosures about Market Risk	30
4.	Controls and Procedures	30

	PART II - OTHER INFORMATION
1.	Legal Proceedings	31
1A.	Risk Factors	31
2.	Share Repurchase Activities	32
5.	Other Information	32
6.	Exhibits	33
	Signatures	34

		Mandatory Convertible Preferred Stock			Common Stock		Capital in Excess of Par			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Hess Stockholders' Equity			Noncontrolling Interests			Total Equity
		(In millions)																									Common Stock		Capital in Excess of Par		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Hess Stockholders' Equity		Noncontrolling Interests		Total Equity

																										(In millions)
For the Three Months Ended March 31, 2021																									For the Three Months Ended March 31, 2021
Balance at January 1, 2021																									Balance at January 1, 2021		$	307	$	5,684	$	130	$	(755)	$	5,366	$	969	$	6,335
Net income (loss)																									Net income (loss)		—		—		252		—		252		84		336
Other comprehensive income (loss)																									Other comprehensive income (loss)		—		—		—		(21)		(21)		—		(21)
Share-based compensation																									Share-based compensation		1		39		—		—		40		—		40
Dividends on common stock																									Dividends on common stock		—		—		(77)		—		(77)		—		(77)
Sale of Class A shares of Hess Midstream LP																									Sale of Class A shares of Hess Midstream LP		—		56		—		—		56		41		97
Noncontrolling interests, net																									Noncontrolling interests, net		—		—		—		—		—		(67)		(67)
Balance at March 31, 2021																									Balance at March 31, 2021		$	308	$	5,779	$	305	$	(776)	$	5,616	$	1,027	$	6,643
For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020																								For the Three Months Ended March 31, 2020
Balance at January 1, 2020		$	—		$	305	$	5,591		$	3,535		$	(699	)	$	8,732		$	974		$	9,706		Balance at January 1, 2020		$	305	$	5,591	$	3,535	$	(699)	$	8,732	$	974	$	9,706
Net income (loss)			—			—		—			(2,433	)		—			(2,433	)		67			(2,366	)	Net income (loss)		—		—		(2,433)		—		(2,433)		67		(2,366)
Other comprehensive income (loss)			—			—		—			—			938			938			—			938		Other comprehensive income (loss)		—		—		—		938		938		—		938
Share-based compensation			—			2		42			(5	)		—			39			—			39		Share-based compensation		2		42		(5)		—		39		—		39
Dividends on common stock			—			—		—			(76	)		—			(76	)		—			(76	)	Dividends on common stock		—		—		(76)		—		(76)		—		(76)
Noncontrolling interests, net			—			—		—			—			—			—			(63	)		(63	)	Noncontrolling interests, net		—		—		—		—		—		(63)		(63)
Balance at March 31, 2020		$	—		$	307	$	5,633		$	1,021		$	239		$	7,200		$	978		$	8,178		Balance at March 31, 2020		$	307	$	5,633	$	1,021	$	239	$	7,200	$	978	$	8,178

For the Three Months Ended March 31, 2019
Balance at January 1, 2019		$	1		$	291	$	5,386		$	4,257		$	(306	)	$	9,629		$	1,259		$	10,888
Net income (loss)			—			—		—			32			—			32			43			75
Other comprehensive income (loss)			—			—		—			—			(344	)		(344	)		—			(344	)
Preferred stock conversion			(1	)		12		(11	)		—			—			—			—			—
Share-based compensation			—			1		28			—			—			29			—			29
Dividends on preferred stock			—			—		—			(4	)		—			(4	)		—			(4	)
Dividends on common stock			—			—		—			(78	)		—			(78	)		—			(78	)
Sale of water business to Hess Infrastructure Partners			—			—		78			—			—			78			(78	)		—
Noncontrolling interests, net			—			—		—			—			—			—			(13	)		(13	)
Balance at March 31, 2019		$	—		$	304	$	5,481		$	4,207		$	(650	)	$	9,342		$	1,211		$	10,553

Balance at January 1, 2020	$	584
Additions to capitalized exploratory well costs pending the determination of proved reserves		47
Capitalized exploratory well costs charged to expense		(125	)
Balance at March 31, 2020	$	506

	March 31, 2020		December 31, 2019
	(In millions)
Commodity - crude oil (millions of barrels)		41.3		54.9
Foreign exchange	$	65	$	90
Interest rate swaps	$	100	$	100

						Letters of
	Expiration					Credit		Total		Available
	Date	Capacity		Borrowings		Issued		Used		Capacity
		(In millions)
Hess Corporation
Revolving credit facility	May 2023	$	3,500	$	—	$	—	$	—	$	3,500
Committed lines	Various (a)		345		—		54		54		291
Uncommitted lines	Various (a)		205		—		205		205		—
Total - Hess Corporation		$	4,050	$	—	$	259	$	259	$	3,791

Midstream
Revolving credit facility (b)	December 2024	$	1,000	$	92	$	—	$	92	$	908
Total - Midstream		$	1,000	$	92	$	—	$	92	$	908

Period	Total Number of Shares Purchased (a)		Average Price Paid per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (c) (In millions)
January		—	$	—		—	$	650
February		—		—		—		650
March		35,202		32.34		—		650
Total		35,202	$	32.34		—