[Slide 1]
[Hess Logo]
Amerada Hess Corporation
Acquisition of
[Triton Logo]
July 10, 2001
[Slide 2]
-This presentation contains projections and other
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These projections and
statements reflect the company's current views with respect to
future events and financial performance. No assurances can be
given, however, that these events will occur or that these
projections will be achieved, and actual results could differ
materially from those projected as a result of certain
factors. A discussion of these factors is included in the
company's periodic reports filed with the Securities and
Exchange Commission.
-The SEC permits oil and gas companies, in their filings with
the SEC, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing
economic operating conditions. We use certain terms in this
presentation, such as probable reserves, that the SEC's
guidelines prohibit registrants from including in filings with
the SEC. Investors are urged to consider closely the
disclosure in Amerada Hess's Form 10-K, File No. 1-1204,
available from Amerada Hess, 1185 Avenue of the Americas, New
York, New York 10036 c/o Corporate Secretary. You can also
obtain this form from the SEC by calling 1-800-SEC-0330.
[Slide 3]
Amerada Hess Corporation [Hess Logo]
- $7 billion market capitalization
- $9 billion enterprise value
- New York stock exchange listed company (ticker symbol: AHC)
- Earnings and cash flows from operations:
-Full Year 2000: $1.0 billion earnings and $1.8 billion
cash flow
-First quarter 2001: $337 million earnings and $753 million
cash flow
- 405 MBOEPD average production in Q1 2001
- 1.1 billion barrels of proved reserves
- 1.7 Billion Barrels proved plus probable reserves
- Competitively advantaged refining joint venture with PDVSA
- Focused retail marketing on the US East Coast
[Slide 4]
Principal goals [Hess Logo]
-Exploration & Production - engine of income and growth
-Objectives:
-Grow to minimum 75% of capital employed
-Expand international reserves to at least 33%
outside the United States and North Sea
-Focus on high quality assets in a few
countries
-Accelerate production growth
-Increase reserve life
-Refining & Marketing
-Enhance financial returns from existing assets
[Three pictures line the right side of the page. The first
shows a drilling rig with the word "Exploration". The second
shows a production platform with the word "Production". The
third picture shows a Hess service station with the word
"Marketing".]
[Slide 5]
Summary of Triton acquisition [Hess Logo]
-HESS to commence cash tender offer of $45 per share for all
outstanding common and convertible shares of Triton
-Deal size equal to $3.2 billion including the
assumption of approximately $500 million of debt
-50% premium to previous day share price; 88% of
52-week high
-Unanimously approved and recommended by Triton's
Board of Directors
-Irrevocable commitment by Hicks Muse to sell 38%
ownership stake
-Transaction is expected to close in third quarter 2001
-Purchase price of reserves, including recent discoveries:
-Proved: $ 9.79/BOE
-Proved+Probable: $ 5.66/BOE
-Purchase price of reserves based on Hess mid-year 2001
estimates
-2-
[Slide 6]
Summary [Hess Logo]
-Acquisition Benefits
-Continues transformation to exploration and production
-Expands international reserves
-Accelerates and extends production growth
-Provides significant exploration potential
-Meets financial goals
-Enhances competitive position
[Slide 7]
Continues transformation to exploration &
production [Hess Logo]
-Capital Employed
[Three Pie Charts representing the following information:
1997 HESS
-57% Capital Employed in R&M
-43% Capital Employed in E&P
2001 HESS
-49% Capital Employed in R&M
-51% Capital Employed in E&P
2001E HESS + TRITON
-24% Capital Employed in R&M
-76% Capital Employed in E&P]
-76% of the combined 2001 capital employed will be devoted to
E&P operations
[Slide 8]
Expands international reserves [Hess Logo]
[Map of the World representing the following information in
four captions:
-United States
-22% Reserves
-North Sea
-40% Reserves
-3-
-Africa
-13% Reserves
-Southeast Asia
-13% Reserves]
-88 % of proved reserves are in four core areas
-Proved reserves based on Hess mid-year 2001 estimates
[Slide 9]
Expands international reserves [Hess Logo]
-Hess increases high-potential international reserves
[Pie Chart of proved reserves of HESS representing the
following information:
-International 21%
-United States 28%
-North Sea 51%
-1.1 Billion BOE HESS]
[Pie Chart of proved reserves of HESS + TRITON representing
the following information:
-International 38%
-United States 22%
-North Sea 40%
-1.4 Billion BOE HESS + TRITON]
[Arrow connecting the two pie charts containing the words
"Balances Portfolio"]
-Proved reserves based on Hess mid-year 2001 estimates
[Slide 10]
Accelerates and extends production growth [Hess Logo]
-Production
[Bar graph representing the following information:
-2000 Pro Forma
-4-
-HESS 374 MBOEPD
-TRITON 31 MBOEPD
-Combined 405 MBOEPD
-2001 Pro Forma
-HESS 430 MBOEPD
-TRITON 55 MBOEPD
-Combined 485 MBOEPD
-2002
-HESS 450 MBOEPD
-TRITON 85 MBOEPD
-Combined 535 MBOEPD
-2003
-HESS 460 MBOEPD
-TRITON 152 MBOEPD
-Combined 612 MBOEPD
-CAGR: 15% combined vs. 7% Hess alone]
[Slide 11]
Accelerates and extends production growth [Hess Logo]
-Reserve to Production ratio
[Bar graph representing the following information:
-Before
-HESS
-7.7 Proved Reserve to Production ratio
-13.3 Proved + Probable Reserve to Production
ratio
-TRITON
-26.2 Proved Reserve to Production ratio
-52.1 Proved + Probable Reserve to Production
ratio
-After
-HESS + TRITON
-9.1 Proved Reserve to Production ratio
-16.2 Proved + Probable Reserve to Production
ratio]
-Source: Reported 2000 Reserve and Production Data of HESS and
TRITON + HESS estimates for TRITON discoveries.
-5-
[Slide 12]
Provides significant exploration potential [Hess Logo]
[Three maps of Africa showing the following:
-Africa
-Magnified map of Equatorial Guinea and Gabon coming from the
map of Africa and containing the following labeled area:
-Upper Cretaceous Deep Water Fairway
-Magnified map of Equatorial Guinea coming from the magnified
map of Equatorial Guinea and Gabon and containing the
following labeled areas
-Block F
-Block G
-Okume
-Oveng
-Ceiba]
-Recent Discoveries
-Ceiba October 1999
-Okume June 2001
-Oveng June 2001
-Gross reserve potential of over 400 MMBOE
-Exploration Potential
-1.8 million net acres with 90% yet to be explored
-85% equity in blocks F and G in Equatorial Guinea
with 7 wells to be drilled over the next 12 months
-25% equity in Tolo block in Gabon with 1 well to be
drilled this year
[Slide 13]
Meets financial goals [Hess Logo]
-Cost savings $ Million
-G&A $14
-Exploration $32
-Total before tax savings $46
-Total after tax savings $33
-6-
[Slide 14]
Meets financial goals [Hess Logo]
-Year-end Debt-to-Capital ratio
[Bar graph representing the following information:
-At closing
-52% Year-end Debt-to-Capital ratio
-2002
-45% Year-end Debt-to-Capital ratio
-2003
-36% Year-end Debt-to-Capital ratio]]
-Pro-forma based on $24.00 WTI oil price
[Slide 15]
Meets financial goals [Hess Logo]
-Strengthens cash flow and reserves per share
[Two bar graphs representing the following information:
-Cash flow per share Based on 2002E pro-forma
-HESS
-$24.13 Cash Flow per Share
-HESS + TRITON
-$27.66 Cash Flow per Share
-Proved Reserves per share Based on mid-year 2001 estimates
for Hess and Triton
-HESS
-12.7 Proved reserves (BOE) per Share
-HESS + TRITON
-16.4 Proved Reserves (BOE) per Share]
-Pro-forma based on $24.00 WTI oil price
[Slide 16]
Meets financial goals [Hess Logo]
-Accretive to earnings and cash flow per share
-7-
[Two Bar graphs representing the following information:
-Earnings
-2002
-1%
-2003
-4%
-Cash flow
-2002
-15%
-2003
-26%]
-Pro-forma based on $24.00 WTI oil price, purchase accounting
and goodwill of $980 Million
[Slide 17]
Enhances competitive position [Hess Logo]
-2001 Estimated Production (MBOEPD)
[Bar graph representing the following information:
-Conoco/Gulf of Canada 884 MBOEPD
-Phillips 850 MBOEPD
-Anadarko 550 MBOEPD
-HESS + TRITON (2002) 535 MBOEPD
-HESS (2002) 450 MBOEPD
-TRITON (2002) 85 MBOEPD
-Unocal 505 MBOEPD
-Occidental 500 MBOEPD
-HESS + TRITON (2001 Pro Forma) 485 MBOEPD
-HESS (2001 Pro Forma) 430 MBOEPD
-TRITON (2001 Pro Forma) 55 MBOEPD
-Talisman 450 MBOEPD
-HESS 430 MBOEPD
-Marathon 420 MBOEPD
-Burlington 380 MBOEPD
-Devon 365 MBOEPD
-Kerr McGee 330 MBOEPD
-Apache 325 MBOEPD
-Enterprise 255 MBOEPD
-8-
-EOG 184 MBOEPD
-Ocean 155 MBOEPD
-Murphy 115 MBOEPD
-Noble 102 MBOEPD
-Vintage 100 MBOEPD
-TRITON 55 MBOEPD]
-Source: Company Press Releases and Presentations
[Slide 18]
Conclusion [Hess Logo]
-Acquisition Benefits
-Continues transformation to exploration and
production
-Expands international reserves
-Accelerates and extends production growth
-Provides significant exploration upside
-Meets financial goals
-Enhances competitive position
[Slide 19]
[Hess Logo]
-9-