Hess (HES) 8-K Amerada Hess Reports Results for the Second Quarter of 2004

Exhibit 99(1)

news release

AMERADA HESS CORPORATION 1185 Avenue of the Americas, N.Y., N.Y. 10036

FOR IMMEDIATE RELEASE

AMERADA HESS REPORTS RESULTS FOR THE SECOND QUARTER OF 2004

     New York, New York....July 28, 2004...Amerada Hess Corporation (NYSE: AHC) reported net income of $288 million for the second quarter of 2004 compared with income of $252 million for the second quarter of 2003. Net income in the second quarter of 2004 and 2003 includes income of $7 million and $189 million, respectively, from discontinued operations. The after-tax results by major operating activity in 2004 and 2003 are as follows:

	Three months ended						Six months ended
	June 30 (unaudited)						June 30 (unaudited)
	2004			2003			2004			2003
	(In millions, except per share amounts)
Exploration and production	$	182		$	88		$	389		$	207
Refining and marketing		160			46			272			183
Corporate		(24	)		(27	)		(26	)		(47	)
Interest expense		(37	)		(44	)		(73	)		(91	)
Income from continuing operations		281			63			562			252
Discontinued operations
Net gains from asset sales		—			175			—			116
Income from operations		7			14			7			53
Income from cumulative effect of accounting change		—			—			—			7
Net income	$	288		$	252		$	569		$	428
Income per share from continuing operations (diluted)	$	2.77		$	.71		$	5.54		$	2.84
Net income per share (diluted)	$	2.84		$	2.83		$	5.61		$	4.81

     Exploration and production earnings from continuing operations were $182 million in the second quarter of 2004 compared with $88 million in the second quarter of 2003. The Corporation’s oil and gas production, on a barrel-of-oil equivalent basis, was 351,000 barrels per day in the second quarter of 2004, a decrease of 7% from the second quarter of 2003. The decline in production was primarily due to asset sales and exchanges in 2003. In the second quarter of 2004, the Corporation’s average worldwide crude oil selling price, including the effect of hedging, was $25.76 per barrel, an increase of $1.66 per barrel from the second quarter of 2003. The Corporation’s average United States natural gas selling price,

including the effect of hedging, was $5.23 per Mcf in the second quarter of 2004, an increase of $1.14 per Mcf from the second quarter of 2003. Exploration and production earnings include an after-tax gain of $15 million in the second quarter of 2004 from the sale of a non-producing asset and after-tax charges of $6 million and $23 million in the second quarter of 2004 and 2003, respectively, for accrued severance and a reduction in leased office space in London.

     Refining and marketing earnings were $160 million in the second quarter of 2004 compared with $46 million in the second quarter of 2003. The increase principally reflects higher refining margins and increased utilization rates. Refining and marketing earnings in the second quarter of 2003 included a net loss of $20 million from the sale of the Corporation’s interest in a shipping joint venture.

     Capital expenditures in the second quarter of 2004 amounted to $372 million of which $357 million related to exploration and production activities. Capital expenditures in the second quarter of 2003 amounted to $367 million, including $339 million for exploration and production.

Consolidated Financial Information (unaudited)

	Three months ended June 30				Six months ended June 30
	2004		2003		2004		2003
	(In millions, except per share amounts)
Income Statement Information
Sales and other operating revenues	$	3,803	$	3,199	$	8,291	$	7,453
Income from continuing operations	$	281	$	63	$	562	$	252
Discontinued operations
Net gains from asset sales		—		175		—		116
Income from operations		7		14		7		53
Cumulative effect of accounting change		—		—		—		7
Net income	$	288	$	252	$	569	$	428
Income per share from continuing operations (diluted)	$	2.77	$	.71	$	5.54	$	2.84
Net income per share (diluted)	$	2.84	$	2.83	$	5.61	$	4.81
Weighted average number of shares (diluted)		101.4		89.0		101.5		89.1

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AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

			Second			Second			First
			Quarter			Quarter			Quarter
			2004			2003			2004
Line			(A)			(B)			(C)
No.
		Income Statement
		Revenues and Non-operating Income
	1	Sales and other operating revenues	$	3,803		$	3,199		$	4,488
		Non-operating income (expense)
	2	Gain (loss) on asset sales		3			(9	)		19
	3	Equity in income of HOVENSA L.L.C.		97			15			51
	4	Other		33			8			4
	5	Total revenues and non-operating income		3,936			3,213			4,562
		Costs and Expenses
	6	Cost of products sold		2,618			2,140			3,288
	7	Production expenses		197			191			187
	8	Marketing expenses		174			167			177
	9	Exploration expenses, including dry holes and lease impairment		63			88			78
	10	Other operating expenses		47			49			48
	11	General and administrative expenses		96			106			76
	12	Interest expense		60			77			57
	13	Depreciation, depletion and amortization		239			270			226
	14	Total costs and expenses		3,494			3,088			4,137
	15	Income from continuing operations before income taxes		442			125			425
	16	Provision for income taxes		161			62			144
	17	Income from continuing operations		281			63			281
	18	Discontinued operations		7			189		—
	19	Net income	$	288		$	252		$	281
	20	Preferred stock dividends		12			—			12
	21	Net income applicable to common stockholders	$	276		$	252		$	269
		Segment Earnings Analysis
	22	Exploration and production	$	182		$	88		$	207
	23	Refining and marketing		160			46			112
	24	Corporate		(24	)		(27	)		(2	)
	25	Interest expense		(37	)		(44	)		(36	)
	26	Income from continuing operations		281			63			281
	27	Discontinued operations		7			189		—
	28	Net income	$	288		$	252		$	281
	29	Net Cash Provided by Operating Activities (*)	$	438		$	571		$	394
		Capital Expenditures
	30	Exploration and production	$	357		$	339		$	352
	31	Refining and marketing		15			28			12
	32	Total capital expenditures	$	372		$	367		$	364
		At End of Period
	33	Total debt	$	3,889		$	4,642		$	3,928
	34	Stockholders’ equity	$	5,567		$	4,573		$	5,489

(*) Includes changes in working capital.

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AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)

			First Half
			2004			2003
Line			(A)			(B)
No.
		Income Statement
		Revenues and Non-operating Income
	1	Sales and other operating revenues	$	8,291		$	7,453
		Non-operating income
	2	Gain on asset sales		22			39
	3	Equity in income of HOVENSA L.L.C.		148			65
	4	Other		37			19
	5	Total revenues and non-operating income		8,498			7,576
		Costs and Expenses
	6	Cost of products sold		5,906			5,228
	7	Production expenses		384			382
	8	Marketing expenses		351			337
	9	Exploration expenses, including dry holes and lease impairment		141			194
	10	Other operating expenses		95			100
	11	General and administrative expenses		172			183
	12	Interest expense		117			151
	13	Depreciation, depletion and amortization		465			546
	14	Total costs and expenses		7,631			7,121
	15	Income from continuing operations before income taxes		867			455
	16	Provision for income taxes		305			203
	17	Income from continuing operations		562			252
	18	Discontinued operations		7			169
	19	Cumulative effect of change in accounting principle, net		—			7
	20	Net income	$	569		$	428
	21	Preferred stock dividends		24		—
	22	Net income applicable to common stockholders	$	545		$	428
	23	Net Cash Provided by Operating Activities	$	832		$	1,059
		Capital Expenditures
	24	Exploration and production	$	709		$	660
	25	Refining and marketing		27			49
	26	Total capital expenditures	$	736		$	709
			June 30			December 31
			2004			2003
		Balance Sheet Information
	27	Current assets	$	3,296		$	3,186
	28	Investments		1,243			1,095
	29	Property, plant and equipment — net		8,144			7,978
	30	Other assets		1,863			1,724
	31	Total assets	$	14,546		$	13,983
	32	Current portion of long-term debt	$	104		$	73
	33	Other current liabilities		3,066			2,596
	34	Long-term debt		3,785			3,868
	35	Deferred liabilities and credits		2,024			2,106
	36	Stockholders’ equity excluding other comprehensive income (loss)		6,243			5,690
	37	Accumulated other comprehensive income (loss)		(676	)		(350	)
	38	Total liabilities and stockholders’ equity	$	14,546		$	13,983

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AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)

			Second		Second		First
			Quarter		Quarter		Quarter
			2004		2003		2004
			(A)		(B)		(C)
Line
No.		Operating Data
		Net Production Per Day
		Crude oil — barrels
	1	United States		41		45		40
	2	United Kingdom		77		96		78
	3	Norway		27		24		27
	4	Equatorial Guinea		27		24		22
	5	Algeria		24		15		20
	6	Denmark		23		23		22
	7	Gabon		11		10		13
	8	Azerbaijan		2		2		2
	9	Indonesia		1		1		1
	10	Total		233		240		225
		Natural gas liquids — barrels
	11	United States		12		9		12
	12	United Kingdom		4		8		6
	13	Norway		1		1		1
	14	Indonesia and Thailand		1		2		2
	15	Total		18		20		21
		Natural gas — mcf
	16	United States		160		264		183
	17	United Kingdom		306		327		282
	18	Norway		27		28		28
	19	Denmark		25		28		23
	20	Indonesia and Thailand		83		48		86
	21	Total		601		695		602
	22	Barrels of oil equivalent (*)		351		376		346
		Average Selling Price (including hedging)
		Crude oil — per barrel
	23	United States	$	25.27	$	23.12	$	25.49
	24	Foreign		25.87		24.31		27.10
		Natural gas liquids — per barrel
	25	United States	$	26.33	$	21.84	$	25.78
	26	Foreign		29.21		19.44		23.44
		Natural gas — per mcf
	27	United States	$	5.23	$	4.09	$	5.20
	28	Foreign		3.54		2.58		4.22
		Marketing and Refining —
		Barrels Per Day
	29	Refined products sold		404		399		483
	30	Refinery runs (net)		244		215		247

(*) Includes production from properties classified as discontinued operations of 14 thousand barrels of oil equivalent per day in the second quarter of 2003.

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AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)

			First Half
			2004		2003
			(A)		(B)
Line
No.		Operating Data
		Net Production Per Day
		Crude oil — barrels
	1	United States		40		47
	2	United Kingdom		77		99
	3	Norway		27		24
	4	Equatorial Guinea		25		25
	5	Algeria		22		18
	6	Denmark		23		24
	7	Gabon		12		10
	8	Azerbaijan		2		2
	9	Indonesia		1		2
	10	Colombia		—		6
	11	Total		229		257
		Natural gas liquids — barrels
	12	United States		12		10
	13	United Kingdom		5		7
	14	Norway		1		1
	15	Indonesia and Thailand		2		2
	16	Total		20		20
		Natural gas — mcf
	17	United States		171		291
	18	United Kingdom		294		324
	19	Norway		28		27
	20	Denmark		24		31
	21	Indonesia and Thailand		85		52
	22	Total		602		725
	23	Barrels of oil equivalent (*)		349		398
		Average Selling Price (including hedging)
		Crude oil — per barrel
	24	United States	$	25.38	$	23.79
	25	Foreign		26.52		24.82
		Natural gas liquids — per barrel
	26	United States	$	26.06	$	24.60
	27	Foreign		26.08		22.81
		Natural gas — per mcf
	28	United States	$	5.22	$	4.27
	29	Foreign		3.87		2.81
		Marketing and Refining —
		Barrels Per Day
	30	Refined products sold		444		431
	31	Refinery runs (net)		246		207

(*) Includes production from properties classified as discontinued operations of 26 thousand barrels of oil equivalent per day in the first half of 2003.

Contact: Amerada Hess Corporation — J.R. Wilson (212) 536-8940

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