Analysis of Reportable Segments
Hess Corp. operates in 2 segments: Exploration and Production and Midstream.
Segment Profit Margin
Hess Corp., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 21.16% | 10.30% | -60.87% | 0.82% | 0.81% |
| Midstream | 21.13% | 23.75% | 21.06% | 16.98% | 16.83% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production Segment Profit Margin
- The Exploration and Production segment experienced significant volatility over the observed periods. Starting from relatively low positive margins of 0.81% in 2018 and 0.82% in 2019, the segment faced a substantial decline in 2020, reporting a negative margin of -60.87%. This marks a dramatic deterioration, likely reflecting considerable challenges during that year. However, the segment showed a notable recovery in the following years, with profit margins improving to 10.3% in 2021 and further increasing to 21.16% in 2022. This upward trend suggests a strong rebound and stabilization in profitability by the end of the period.
- Midstream Segment Profit Margin
- The Midstream segment demonstrated consistent positive performance throughout all the years. Starting at 16.83% in 2018, the margin slightly increased to 16.98% in 2019. It continued to improve in 2020, reaching 21.06%, and peaked at 23.75% in 2021. In 2022, there was a minor decline to 21.13%, yet the margin remained substantially higher than the initial years. This pattern reflects overall stable and strong profitability in the Midstream segment, with only a modest pullback in the final observed year.
- Comparative Insights
- Comparing the two segments reveals contrasting trends. The Exploration and Production segment underwent significant instability, including a sharp loss in 2020, followed by recovery. In contrast, the Midstream segment maintained steady and relatively high profit margins throughout, indicating more consistent operational efficiency or market conditions. The recovery in the Exploration and Production margin post-2020 aligns with a return toward stable profitability, but it still remains below the Midstream segment’s margins in the last two years.
Segment Profit Margin: Exploration and Production
Hess Corp.; Exploration and Production; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income (loss) attributable to Hess Corporation | 2,396) | 770) | (2,841) | 53) | 51) |
| Sales and other operating revenues | 11,324) | 7,473) | 4,667) | 6,495) | 6,323) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 21.16% | 10.30% | -60.87% | 0.82% | 0.81% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Net income (loss) attributable to Hess Corporation ÷ Sales and other operating revenues
= 100 × 2,396 ÷ 11,324 = 21.16%
- Net Income (Loss) Attributable to Hess Corporation
- Net income remained relatively stable in 2018 and 2019, recording positive figures of 51 million and 53 million USD, respectively. However, there was a significant decline in 2020, with a substantial loss amounting to 2,841 million USD. Following this sharp downturn, the company experienced a remarkable recovery, reporting net income of 770 million USD in 2021 and further increasing to 2,396 million USD in 2022.
- Sales and Other Operating Revenues
- Revenues displayed a decreasing trend from 6,495 million USD in 2019 to 4,667 million USD in 2020, coinciding with the period of net loss. Subsequently, there was a strong rebound in sales, rising significantly to 7,473 million USD in 2021 and continuing upward to 11,324 million USD in 2022, surpassing prior years' levels.
- Segment Profit Margin
- The segment profit margin was stable and positive around 0.8% in 2018 and 2019. In 2020, the margin plummeted to negative 60.87%, reflecting the severe financial difficulties that year. The margin then improved substantially to 10.3% in 2021, with further growth to 21.16% in 2022, indicating enhanced profitability within the segment.
Segment Profit Margin: Midstream
Hess Corp.; Midstream; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income (loss) attributable to Hess Corporation | 269) | 286) | 230) | 144) | 120) |
| Sales and other operating revenues | 1,273) | 1,204) | 1,092) | 848) | 713) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 21.13% | 23.75% | 21.06% | 16.98% | 16.83% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Net income (loss) attributable to Hess Corporation ÷ Sales and other operating revenues
= 100 × 269 ÷ 1,273 = 21.13%
- Net Income (Loss) Attributable to the Segment
- The net income attributable to the segment demonstrated an overall upward trend from 2018 to 2021, starting at $120 million and rising to a peak of $286 million in 2021. However, there was a slight decline in 2022, with net income decreasing to $269 million. This pattern suggests sustained growth over several years followed by a modest contraction in the most recent period.
- Sales and Other Operating Revenues
- Sales and other operating revenues steadily increased each year from $713 million in 2018 to $1,273 million in 2022. This continuous growth indicates expanding business operations or successful revenue generation strategies throughout the observed period, with no recorded declines.
- Segment Profit Margin
- The segment profit margin improved consistently from 16.83% in 2018 to a high of 23.75% in 2021, showing increased profitability efficiency. In 2022, the margin decreased to 21.13%, which, despite being lower than the previous year, remains significantly higher than the levels observed in 2018 and 2019. This suggests that profit efficiency improved overall during the period, despite a recent partial reversal.
- Overall Analysis
- The data reveal a general positive trajectory in both revenue and profitability metrics over the five-year span. The rising sales and profit margins point to operational growth and improved cost management or pricing power. The slight declines in net income and profit margin in 2022 may indicate emerging challenges or changing market conditions affecting profitability, although the segment continues to perform better than in the earlier years.
Segment Return on Assets (Segment ROA)
Hess Corp., ROA by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 15.95% | 5.43% | -20.76% | 0.32% | 0.32% |
| Midstream | 7.13% | 7.79% | 6.39% | 4.12% | 3.65% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production Segment ROA
- The return on assets for the Exploration and Production segment exhibited significant volatility over the period. It remained stable at 0.32% from 2018 through 2019, followed by a substantial decline reaching -20.76% in 2020, indicating considerable operational or market challenges during that year. Subsequently, there was a marked recovery with the ROA rising to 5.43% in 2021 and further improving to 15.95% in 2022. This upward trend in the last two years suggests a strong return to profitability and potentially improved asset utilization or market conditions impacting this segment positively.
- Midstream Segment ROA
- The Midstream segment demonstrated a consistent positive trajectory in return on assets throughout the timeframe. Starting from 3.65% in 2018, the ROA increased steadily each year, peaking at 7.79% in 2021. In 2022, there was a slight decrease to 7.13%, though the value remained significantly higher than the starting point. This trend reflects steady operational efficiency and asset performance, with only a minor dip in the latest year that may warrant monitoring but does not currently indicate a reversal of the positive trend.
- Comparative Insights
- Overall, the Midstream segment exhibited more stable and steadily improving asset returns compared to the Exploration and Production segment, which showed marked fluctuation and a period of substantial negative returns before recovery. The divergence in trends suggests differing risk profiles and operational dynamics between the two segments, with Midstream maintaining consistent profitability and Exploration and Production subject to greater market or operational impacts but demonstrating resilience in recent years.
Segment ROA: Exploration and Production
Hess Corp.; Exploration and Production; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income (loss) attributable to Hess Corporation | 2,396) | 770) | (2,841) | 53) | 51) |
| Identifiable assets | 15,022) | 14,173) | 13,688) | 16,790) | 16,109) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 15.95% | 5.43% | -20.76% | 0.32% | 0.32% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment ROA = 100 × Net income (loss) attributable to Hess Corporation ÷ Identifiable assets
= 100 × 2,396 ÷ 15,022 = 15.95%
- Net Income (Loss) Attributable to Hess Corporation
- The net income demonstrated significant volatility over the observed period. It began with modest positive figures in 2018 and 2019, recording 51 million and 53 million US dollars, respectively. A drastic reversal occurred in 2020, with a substantial loss amounting to -2,841 million US dollars. Recovery followed in the subsequent years, with net income rising sharply to 770 million US dollars in 2021 and further improving to 2,396 million US dollars in 2022, indicating strong financial rebound and growth.
- Identifiable Assets
- The value of identifiable assets exhibited fluctuations throughout the years. Starting at 16,109 million US dollars in 2018, assets experienced a slight increase to 16,790 million US dollars in 2019. A notable decline was observed in 2020 with a drop to 13,688 million US dollars. The asset base showed signs of gradual recovery thereafter, increasing modestly to 14,173 million US dollars in 2021 and reaching 15,022 million US dollars in 2022, though it remained below the initial levels reported in 2018 and 2019.
- Segment Return on Assets (ROA)
- The segment return on assets followed a trend consistent with net income movements. It maintained stability at 0.32% in both 2018 and 2019 before plummeting to a negative -20.76% in 2020, reflecting the severe loss experienced in that year. Subsequent recovery was evident, with ROA improving to 5.43% in 2021 and substantially rising to 15.95% in 2022, indicating enhanced efficiency and profitability in asset utilization within the segment.
Segment ROA: Midstream
Hess Corp.; Midstream; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net income (loss) attributable to Hess Corporation | 269) | 286) | 230) | 144) | 120) |
| Identifiable assets | 3,775) | 3,671) | 3,599) | 3,499) | 3,285) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 7.13% | 7.79% | 6.39% | 4.12% | 3.65% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment ROA = 100 × Net income (loss) attributable to Hess Corporation ÷ Identifiable assets
= 100 × 269 ÷ 3,775 = 7.13%
- Net Income (Loss) Attributable to Hess Corporation
- Net income in the Midstream segment exhibited a generally upward trend from 2018 through 2021, increasing from $120 million in 2018 to a peak of $286 million in 2021. However, there was a slight decline in 2022 to $269 million, indicating a modest reduction in profitability after four consecutive years of growth.
- Identifiable Assets
- The total identifiable assets in this segment increased steadily over the examined period. Starting at $3,285 million in 2018, assets grew consistently each year, reaching $3,775 million by the end of 2022. This steady asset growth suggests ongoing investment or accumulation of resources within the segment.
- Segment Return on Assets (ROA)
- The segment's ROA demonstrated a marked improvement over the five-year period. It increased from 3.65% in 2018 to a high of 7.79% in 2021, reflecting enhanced profitability relative to the asset base. In 2022, ROA decreased slightly to 7.13%, which, although lower than the previous year, remained significantly higher than the 2018 level. This indicates sustained efficiency gains with a slight recent softening.
- Overall Analysis
- The Midstream segment showed strong financial performance characterized by growing net income and asset base alongside improving returns on assets over the majority of the period. The peak in profitability metrics during 2021 suggests a particularly successful year, while the minor declines in 2022 highlight the potential for volatility or sector-specific challenges. The continuation of asset growth combined with maintained elevated ROA levels suggests the segment remains fundamentally sound with effective asset utilization.
Segment Asset Turnover
Hess Corp., asset turnover by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 0.75 | 0.53 | 0.34 | 0.39 | 0.39 |
| Midstream | 0.34 | 0.33 | 0.30 | 0.24 | 0.22 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The annual reportable segment asset turnover data reveals distinct trends for the two segments over the five-year period from 2018 to 2022.
- Exploration and Production Segment
- This segment exhibited a generally positive trend in asset turnover ratios. From 2018 through 2020, the ratio held relatively steady, with a slight decline from 0.39 in 2018 and 2019 to 0.34 in 2020. However, starting in 2021, a marked improvement is noted, with the ratio increasing significantly to 0.53 and continuing to rise to 0.75 by the end of 2022. This upward movement suggests enhanced efficiency or increased revenue generation relative to assets employed in this segment during the latter part of the period.
- Midstream Segment
- The Midstream segment displays a steady, moderate increase in asset turnover throughout the entire timeframe. The ratio started at 0.22 in 2018 and rose incrementally each year, reaching 0.24 in 2019, 0.30 in 2020, 0.33 in 2021, and 0.34 in 2022. Although the increases are gradual, the consistent upward trajectory indicates ongoing improvements in utilizing assets to generate revenue within this segment.
Overall, both segments show positive development in asset turnover ratios, reflecting improved operational efficiency or growth in revenue relative to assets over the examined period. The Exploration and Production segment notably displays a sharper increase from 2021 onwards compared to the Midstream segment, which experiences steady but less pronounced gains.
Segment Asset Turnover: Exploration and Production
Hess Corp.; Exploration and Production; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 11,324) | 7,473) | 4,667) | 6,495) | 6,323) |
| Identifiable assets | 15,022) | 14,173) | 13,688) | 16,790) | 16,109) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.75 | 0.53 | 0.34 | 0.39 | 0.39 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Identifiable assets
= 11,324 ÷ 15,022 = 0.75
The analysis of the Exploration and Production segment data over the five-year period reveals several noteworthy trends in operational performance and asset management.
- Sales and Other Operating Revenues
- Revenues experienced fluctuations throughout the period, beginning at $6,323 million in 2018 and showing a modest increase to $6,495 million in 2019. However, in 2020, revenues declined substantially to $4,667 million, likely reflecting adverse market conditions or operational challenges. This decline was followed by a strong recovery in 2021, with revenues rising to $7,473 million, and a further significant increase in 2022 to $11,324 million, indicating a favorable business environment or improved production and pricing.
- Identifiable Assets
- The value of identifiable assets showed a moderate downward trend over the analyzed years. Starting at $16,109 million in 2018, assets increased slightly in 2019 to $16,790 million. This was followed by a notable decrease in 2020 to $13,688 million, persisting somewhat in 2021 with a modest rise to $14,173 million, and a small increase to $15,022 million in 2022. The decrease in 2020 assets could be associated with impairments, divestitures, or reduced capital investments during that year.
- Segment Asset Turnover
- The segment asset turnover ratio, which measures efficiency in utilizing assets to generate revenue, remained stable at 0.39 in both 2018 and 2019 before dropping to 0.34 in 2020. This decline aligns with the reduced revenue and lower asset base that year. A significant improvement occurred in 2021, with the ratio increasing to 0.53, and this positive trend accelerated in 2022, reaching 0.75. The rising asset turnover indicates enhanced operational efficiency, with the segment generating more sales from each dollar of assets than in prior years.
In summary, the segment experienced a challenging year in 2020 with declines in revenue, assets, and asset utilization efficiency. However, the subsequent years demonstrated a robust recovery, characterized by strong revenue growth and improving asset turnover ratios, suggesting effective management of resources and improved market conditions in 2021 and 2022.
Segment Asset Turnover: Midstream
Hess Corp.; Midstream; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 1,273) | 1,204) | 1,092) | 848) | 713) |
| Identifiable assets | 3,775) | 3,671) | 3,599) | 3,499) | 3,285) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.34 | 0.33 | 0.30 | 0.24 | 0.22 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Identifiable assets
= 1,273 ÷ 3,775 = 0.34
The data reveals a consistent upward trend in key financial metrics over the five-year period analyzed. Sales and other operating revenues exhibited steady growth each year, increasing from 713 million US dollars in 2018 to 1,273 million US dollars by the end of 2022. This represents a notable expansion in revenue-generating capacity, highlighting positive business momentum within the segment.
Identifiable assets also showed gradual growth, rising from 3,285 million US dollars in 2018 to 3,775 million US dollars in 2022. The increase in asset base was moderate and relatively stable, indicating ongoing investments or asset retention without abrupt changes.
Segment asset turnover, which measures the efficiency of using assets to generate revenue, improved consistently over the period. The ratio increased from 0.22 in 2018 to 0.34 in 2022. This upward trend signifies enhanced operational efficiency and better utilization of the segment's asset base to produce sales.
- Sales and other operating revenues
- Consistently increased year over year, reflecting sustained revenue growth and positive demand conditions.
- Identifiable assets
- Showed steady growth, suggesting controlled asset expansion aligned with business needs.
- Segment asset turnover
- Improved continuously, indicating increasing efficiency in asset usage to drive segment revenues.
Overall, the data indicates a strengthening performance in the segment characterized by growing revenues, moderately increasing asset levels, and improving asset turnover efficiency. This pattern suggests effective management of resources and a positive operational trajectory over the evaluated period.
Segment Capital Expenditures to Depreciation
Hess Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 1.70 | 1.25 | 0.88 | 1.30 | 1.09 |
| Midstream | 1.28 | 1.10 | 1.61 | 2.93 | 2.13 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production Segment Capital Expenditures to Depreciation Ratio
- The ratio in this segment fluctuates over the analyzed periods without a consistent upward or downward trend. Starting at 1.09 in 2018, there was an increase to 1.3 in 2019, followed by a decline to 0.88 in 2020. The ratio then recovered in 2021 to 1.25 and reached its highest point of 1.7 in 2022. This pattern suggests variability in capital expenditure relative to depreciation, with a notable increase in investment intensity compared to asset wear and tear in the most recent year.
- Midstream Segment Capital Expenditures to Depreciation Ratio
- The Midstream segment shows a generally declining trend in the capital expenditures to depreciation ratio from 2018 to 2021, followed by a slight improvement in 2022. The ratio peaked at 2.93 in 2019, indicating a high level of capital investment relative to depreciation in that year. After this peak, it decreased substantially to 1.61 in 2020 and further to 1.1 in 2021, indicating reduced capital spending relative to asset depreciation. In 2022, the ratio increased modestly to 1.28, suggesting a partial rebound in capital expenditure activity.
- Comparative Insights Between Segments
- Throughout the period, the Midstream segment maintained higher capital expenditures to depreciation ratios compared to Exploration and Production, indicating generally more aggressive reinvestment relative to asset consumption. However, the Midstream ratio's decline after 2019 contrasts with the Exploration and Production segment's more variable pattern, which notably rose to a peak in 2022. This divergence implies differing investment strategies or asset management priorities between the two segments over the analyzed timeframe.
Segment Capital Expenditures to Depreciation: Exploration and Production
Hess Corp.; Exploration and Production; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 2,589) | 1,698) | 1,678) | 2,576) | 1,909) |
| Depreciation, depletion and amortization | 1,520) | 1,361) | 1,915) | 1,977) | 1,748) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.70 | 1.25 | 0.88 | 1.30 | 1.09 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation, depletion and amortization
= 2,589 ÷ 1,520 = 1.70
The "Exploration and Production" segment demonstrates fluctuations in capital expenditures, depreciation, depletion, and amortization over the five-year period analyzed. Capital expenditures initially increased from 1,909 million US dollars in 2018 to a peak of 2,576 million US dollars in 2019. This was followed by a significant decline to 1,678 million in 2020, a slight uptick to 1,698 million in 2021, and a strong increase again to 2,589 million in 2022.
Depreciation, depletion, and amortization (DD&A) expenses showed a generally decreasing trend during the same timeframe, starting at 1,748 million US dollars in 2018 and increasing slightly to 1,977 million in 2019. Thereafter, the figure decreased to 1,915 million in 2020, followed by a more pronounced drop to 1,361 million in 2021, and a modest increase to 1,520 million in 2022.
The ratio of segment capital expenditures to depreciation reveals additional insight into investment intensity relative to asset consumption. This ratio rose from 1.09 in 2018 to a peak of 1.30 in 2019, suggesting that capital investments outpaced the rate of asset depreciation. A dip to 0.88 in 2020 indicates reduced expenditure relative to DD&A, possibly reflecting either conservative investment or operational adjustments during that year. Subsequently, the ratio increased to 1.25 in 2021 and substantially to 1.70 in 2022, indicating a renewed emphasis on capital expenditures surpassing asset depletion by a noteworthy margin.
Overall, capital investment activity within the segment shows a cyclical pattern with an evident resurgence in 2022, while DD&A has moderately declined over the period. The increasing ratio in recent years signals a potential strategic shift towards asset growth or replacement, possibly in response to market conditions or internal operational priorities.
Segment Capital Expenditures to Depreciation: Midstream
Hess Corp.; Midstream; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | 232) | 183) | 253) | 416) | 271) |
| Depreciation, depletion and amortization | 181) | 166) | 157) | 142) | 127) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.28 | 1.10 | 1.61 | 2.93 | 2.13 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation, depletion and amortization
= 232 ÷ 181 = 1.28
- Capital Expenditures
- The capital expenditures exhibited a fluctuating pattern over the five-year period. The value increased markedly from 271 million US dollars in 2018 to a peak of 416 million US dollars in 2019. Subsequently, capital spending declined sharply to 253 million US dollars in 2020 and further decreased to the lowest point of 183 million US dollars in 2021. In 2022, there was a moderate recovery, with capital expenditures rising to 232 million US dollars.
- Depreciation, Depletion, and Amortization
- Depreciation, depletion, and amortization expenses showed a steady upward trend throughout the period. Starting at 127 million US dollars in 2018, these expenses increased gradually each year, reaching 142 million in 2019, 157 million in 2020, 166 million in 2021, and finally 181 million in 2022. This indicates ongoing asset aging or increasing amortization charges related to the segment's asset base.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation declined over the period, reflecting changes in investment relative to asset depreciation. The ratio dropped from 2.13 in 2018 to a high of 2.93 in 2019, indicating strong investment relative to amortization that year. However, from 2020 onwards, the ratio decreased significantly to 1.61, further declined to a trough of 1.1 in 2021, and slightly recovered to 1.28 in 2022. This trend suggests reduced relative capital investment compared to the rate of asset depreciation, potentially indicating a period of consolidation or lower expansion in the segment.
Sales and other operating revenues
Hess Corp., sales and other operating revenues by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 11,324) | 7,473) | 4,667) | 6,495) | 6,323) |
| Midstream | 1,273) | 1,204) | 1,092) | 848) | 713) |
| Eliminations | (1,273) | (1,204) | (1,092) | (848) | (713) |
| Total | 11,324) | 7,473) | 4,667) | 6,495) | 6,323) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production Segment Revenues
- The Exploration and Production segment exhibited fluctuations over the analyzed period. Revenues remained relatively stable from 2018 to 2019, with a minor increase from 6,323 million US dollars to 6,495 million. However, 2020 saw a notable decline to 4,667 million, reflecting a significant contraction likely influenced by external factors affecting the energy market. Subsequently, revenues rebounded sharply in 2021 to 7,473 million and continued to grow substantially in 2022, reaching 11,324 million. This indicates a strong recovery and robust growth in this segment towards the end of the period.
- Midstream Segment Revenues
- The Midstream segment demonstrated overall upward trends across the reported years. Starting at 713 million in 2018, revenues steadily increased each year, reaching 848 million in 2019, followed by 1,092 million in 2020. Continued growth was observed in 2021 and 2022, with revenues increasing to 1,204 million and 1,273 million, respectively. This consistent growth trend suggests expanding operations or improved market positioning in the Midstream segment during this timeframe.
- Eliminations
- The Eliminations line reflects the consolidation adjustments necessary to avoid double-counting between segments. Values correspond exactly in magnitude but are negative relative to the Midstream segment revenues, showing increasing absolute values from 2018 through 2022 parallel to the Midstream segment’s revenue increase. This pattern confirms appropriate accounting treatment aligning with the growth in intersegment transactions or internal transfers within operations.
- Total Revenues
- The total revenues reported correspond directly to the Exploration and Production segment figures, as Midstream revenues are fully eliminated in consolidation entries. The total revenues mirror the trend seen in the Exploration and Production segment, including the dip in 2020 and the notable growth in 2021 and 2022. This relationship highlights the dominant contribution of Exploration and Production to the consolidated revenues and underscores its critical impact on overall company revenue performance during the period.
Net income (loss) attributable to Hess Corporation
Hess Corp., net income (loss) attributable to hess corporation by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 2,396) | 770) | (2,841) | 53) | 51) |
| Midstream | 269) | 286) | 230) | 144) | 120) |
| Corporate, Interest and Other | (569) | (497) | (482) | (605) | (453) |
| Total | 2,096) | 559) | (3,093) | (408) | (282) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production Segment
- The Exploration and Production segment exhibited significant volatility over the analyzed period. From 2018 to 2019, the net income attributable to this segment showed a marginal increase from $51 million to $53 million. However, in 2020, this segment recorded a substantial loss of $2,841 million, indicating a severe downturn likely influenced by extraordinary factors or industry challenges during that year. The segment recovered sharply in 2021, generating a positive net income of $770 million, and continued its upward trajectory to $2,396 million in 2022, reflecting a strong recovery and growth.
- Midstream Segment
- The Midstream segment demonstrated consistent growth in net income throughout the period. Beginning at $120 million in 2018, it increased steadily each year to $144 million in 2019, then to $230 million in 2020, followed by $286 million in 2021. Although there was a slight decline in 2022 to $269 million, the overall trend remains positive, indicating relatively stable performance and operational efficiency in this segment.
- Corporate, Interest and Other
- The Corporate, Interest, and Other category consistently reported negative net income across all years. The net losses intensified from $453 million in 2018 to $605 million in 2019, followed by an improvement in 2020 to a loss of $482 million. The losses resumed a moderate increase to $497 million in 2021 and further to $569 million in 2022. This persistent negative contribution reflects ongoing corporate expenses, interest costs, or other non-operational charges impacting overall profitability.
- Total Net Income
- The aggregated net income attributable to the corporation displays significant fluctuations over the five-year period. A net loss of $282 million in 2018 deepened to $408 million in 2019, followed by a dramatic downturn to a loss of $3,093 million in 2020, largely driven by the Exploration and Production segment's losses. The company achieved a notable turnaround in 2021, posting a net income of $559 million, which strengthened substantially to $2,096 million in 2022. This pattern indicates a recovery phase commencing in 2021, supported primarily by improvements in the Exploration and Production and Midstream segments, despite ongoing corporate-level expenses.
Depreciation, depletion and amortization
Hess Corp., depreciation, depletion and amortization by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 1,520) | 1,361) | 1,915) | 1,977) | 1,748) |
| Midstream | 181) | 166) | 157) | 142) | 127) |
| Corporate, Interest and Other | 2) | 1) | 2) | 3) | 8) |
| Total | 1,703) | 1,528) | 2,074) | 2,122) | 1,883) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production
- The depreciation, depletion, and amortization (DD&A) expenses showed a fluctuating trend over the observed period. Starting at $1748 million at the end of 2018, the expenses increased to a peak of $1977 million in 2019. This was followed by a slight decrease to $1915 million in 2020. A more significant decline occurred in 2021 with values dropping to $1361 million, before partially recovering to $1520 million in 2022. This pattern suggests variability in asset utilization or changes in reserves and production volumes over time, with a notable reduction during 2021 likely associated with operational adjustments or market conditions.
- Midstream
- The Midstream segment demonstrated a consistent upward trend in DD&A expenses throughout the period. Beginning at $127 million in 2018, the expenses rose steadily each year, reaching $181 million by the end of 2022. This indicates ongoing asset additions, increased capital investments, or accelerated amortization consistent with growth or enhancement of midstream infrastructure.
- Corporate, Interest and Other
- Expenses in the Corporate, Interest and Other category were comparatively minimal and exhibited a declining trend from $8 million in 2018 to $1 million in 2021, before a slight increase to $2 million in 2022. The generally low and diminishing DD&A in this category may reflect limited capital assets or controlled amortization activities in corporate overhead and related areas.
- Total
- Total DD&A expenses mirrored the overall trends observed in the primary segments, with an increase from $1883 million in 2018 to $2122 million in 2019, followed by a minor decrease to $2074 million in 2020. A significant decline was recorded in 2021, dropping to $1528 million, before a partial recovery to $1703 million in 2022. The aggregate values suggest that the pronounced decrease in 2021, driven mainly by the Exploration and Production segment, was only partly offset by rising expenses in the Midstream segment.
Identifiable assets
Hess Corp., identifiable assets by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 15,022) | 14,173) | 13,688) | 16,790) | 16,109) |
| Midstream | 3,775) | 3,671) | 3,599) | 3,499) | 3,285) |
| Corporate, Interest and Other | 2,898) | 2,671) | 1,534) | 1,493) | 2,039) |
| Total | 21,695) | 20,515) | 18,821) | 21,782) | 21,433) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Exploration and Production
- The identifiable assets in Exploration and Production showed a fluctuating trend over the five-year period. Starting at US$16,109 million in 2018, the assets increased slightly to US$16,790 million in 2019. However, there was a notable decline in 2020, with assets dropping to US$13,688 million. The segment then experienced a gradual recovery, rising to US$14,173 million in 2021 and further to US$15,022 million in 2022. Despite the recovery, the 2022 figure remains below the peak observed in 2019.
- Midstream
- The Midstream segment exhibited consistent growth throughout the period under review. Starting from US$3,285 million in 2018, there was a steady annual increase, reaching US$3,499 million in 2019, US$3,599 million in 2020, US$3,671 million in 2021, and finally US$3,775 million in 2022. This steady upward trajectory indicates ongoing investment and expansion in the Midstream assets.
- Corporate, Interest and Other
- Identifiable assets in Corporate, Interest and Other presented a more volatile pattern. Initially valued at US$2,039 million in 2018, the assets declined significantly to US$1,493 million in 2019 and remained relatively stable at US$1,534 million in 2020. However, the segment saw a sharp increase in 2021, with assets rising to US$2,671 million and continuing upward to US$2,898 million in 2022. This rebound suggests renewed corporate investments or reclassifications impacting this category.
- Total Identifiable Assets
- The total identifiable assets mirrored the mixed trends of the individual segments. The total assets increased marginally from US$21,433 million in 2018 to US$21,782 million in 2019 before experiencing a considerable decline to US$18,821 million in 2020. Following this dip, total assets recovered to US$20,515 million in 2021 and further to US$21,695 million in 2022. The fluctuation reflects the decline and recovery seen primarily in the Exploration and Production segment, with Midstream providing steady growth and Corporate assets showing volatility.
Capital expenditures
Hess Corp., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Exploration and Production | 2,589) | 1,698) | 1,678) | 2,576) | 1,909) |
| Midstream | 232) | 183) | 253) | 416) | 271) |
| Total | 2,821) | 1,881) | 1,931) | 2,992) | 2,180) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The capital expenditures data over the five-year period illustrates notable fluctuations across the two main segments: Exploration and Production, and Midstream, as well as the total capital expenditures.
- Exploration and Production
- This segment exhibits a general pattern of variability with an initial increase followed by a sharp decrease and then a considerable rebound. Specifically, capital expenditures rose from 1,909 million USD in 2018 to a peak of 2,576 million USD in 2019, then declined significantly to 1,678 million USD in 2020. In 2021, expenditures remained relatively stable at 1,698 million USD before surging again to 2,589 million USD in 2022, slightly surpassing the 2019 peak.
- Midstream
- The Midstream segment shows a less pronounced but still variable trend. Starting at 271 million USD in 2018, capital expenditures increased to 416 million USD in 2019, followed by a substantial reduction to 253 million USD in 2020. The downward trend continued into 2021, with expenditures falling to 183 million USD, but there was a moderate recovery to 232 million USD in 2022.
- Total Capital Expenditures
- The total capital expenditures mirror the combined patterns seen in the two segments. Overall, total expenditures climbed from 2,180 million USD in 2018 to 2,992 million USD in 2019, before declining sharply to 1,931 million USD in 2020. A slight further decrease was noted in 2021 to 1,881 million USD, followed by a significant increase in 2022 to 2,821 million USD, approaching the high levels observed in 2019.
This data suggests that capital investments experienced considerable volatility, likely reflecting changing strategic priorities or external economic conditions. The Exploration and Production segment is the primary driver of these fluctuations, given its dominant share and the more pronounced swings in investment levels. The Midstream segment, while smaller in absolute terms, follows a somewhat similar pattern but with less recovery in the most recent year. The overall capital expenditure trend indicates cautious investment activity with a resurgence in 2022 after two years of subdued spending.