UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

Form 10-Q 

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

For the quarter ended September 30, 2022

or

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

For the transition period from                      to                     

Commission File Number 1-1204 

HESS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE

(State or Other Jurisdiction of Incorporation or Organization)

13-4921002

(I.R.S. Employer Identification Number)

1185 AVENUE OF THE AMERICAS, NEW YORK, NY

(Address of Principal Executive Offices)

10036

(Zip Code)

(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 September 30, 2022, there were 308,308,466 shares of Common Stock outstanding.

HESS CORPORATION

Form 10-Q

TABLE OF CONTENTS

Item No.		Page Number
	PART I - FINANCIAL INFORMATION
1.	Financial Statements (Unaudited)
	Consolidated Balance Sheet at September 30, 2022, and December 31, 2021	2
	Statement of Consolidated Income for the Three and Nine Months Ended September 30, 2022, and 2021	3
	Statement of Consolidated Comprehensive Income for the Three and Nine Months Ended September 30, 2022, and 2021	4
	Statement of Consolidated Cash Flows for the Nine Months Ended September 30, 2022, and 2021	5
	Statement of Consolidated Equity for the Three and Nine Months Ended September 30, 2022, and 2021	6
	Notes to Consolidated Financial Statements (Unaudited)	7
	Note 1 - Basis of Presentation	7
	Note 2 - Inventories	7
	Note 3 - Property, Plant and Equipment	7
	Note 4 - Hess Midstream LP	8
	Note 5 - Accrued Liabilities	9
	Note 6 - Debt	9
	Note 7 - Revenue	10
	Note 8 - Impairment and Other	11
	Note 9 - Retirement Plans	11
	Note 10 - Weighted Average Common Shares	12
	Note 11 - Guarantees and Contingencies	12
	Note 12 - Segment Information	15
	Note 13 - Financial Risk Management Activities	16
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
3.	Quantitative and Qualitative Disclosures about Market Risk	33
4.	Controls and Procedures	33
	PART II - OTHER INFORMATION
1.	Legal Proceedings	34
2.	Share Repurchase Activities	34
6.	Exhibits	35
	Signatures	36

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

Item 1. Financial Statements.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (UNAUDITED)

	September 30, 2022		December 31, 2021
	(In millions, except share amounts)
Assets
Current Assets:
Cash and cash equivalents	$	2,384	$	2,713
Accounts receivable:
From contracts with customers	1,241		1,062
Joint venture and other	134		149
Inventories	278		223
Other current assets	86		199
Total current assets	4,123		4,346
Property, plant and equipment:
Total — at cost	32,356		31,178
Less: Reserves for depreciation, depletion, amortization and lease impairment	17,264		16,996
Property, plant and equipment — net	15,092		14,182
Operating lease right-of-use assets — net	461		352
Finance lease right-of-use assets — net	131		144
Goodwill	360		360
Deferred income taxes	139		71
Post-retirement benefit assets	617		409
Other assets	720		651
Total Assets	$	21,643	$	20,515
Liabilities
Current Liabilities:
Accounts payable	$	321	$	220
Accrued liabilities	1,703		1,710
Taxes payable	167		528
Current portion of long-term debt	—		517
Current portion of operating and finance lease obligations	121		89
Total current liabilities	2,312		3,064
Long-term debt	8,303		7,941
Long-term operating lease obligations	461		394
Long-term finance lease obligations	185		200
Deferred income taxes	604		383
Asset retirement obligations	1,062		1,005
Other liabilities and deferred credits	522		502
Total Liabilities	13,449		13,489
Equity
Hess Corporation stockholders’ equity:
Common stock, par value $1.00; Authorized — 600,000,000 shares
Issued 308,308,466 shares (2021: 309,744,953)	308		310
Capital in excess of par value	6,227		6,017
Retained earnings	1,354		379
Accumulated other comprehensive loss	(330)		(406)
Total Hess Corporation stockholders’ equity	7,559		6,300
Noncontrolling interests	635		726
Total Equity	8,194		7,026
Total Liabilities and Equity	$	21,643	$	20,515

See accompanying Notes to Consolidated Financial Statements.

2

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED INCOME (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In millions, except per share amounts)
Revenues and Non-Operating Income
Sales and other operating revenues	$	3,122	$	1,759	$	8,390	$	5,236
Gains on asset sales, net	—		29		25		29
Other, net	35		23		101		63
Total revenues and non-operating income	3,157		1,811		8,516		5,328
Costs and Expenses
Marketing, including purchased oil and gas	982		522		2,507		1,362
Operating costs and expenses	398		333		1,067		913
Production and severance taxes	72		42		200		123
Exploration expenses, including dry holes and lease impairment	58		36		134		117
General and administrative expenses	109		76		314		254
Interest expense	125		125		369		360
Depreciation, depletion and amortization	471		349		1,199		1,130
Impairment and other	54		—		54		147
Total costs and expenses	2,269		1,483		5,844		4,406
Income Before Income Taxes	888		328		2,672		922
Provision for income taxes	282		143		807		388
Net Income	606		185		1,865		534
Less: Net income attributable to noncontrolling interests	91		70		266		240
Net Income Attributable to Hess Corporation	$	515	$	115	$	1,599	$	294
Net Income Attributable to Hess Corporation Per Common Share:
Basic	$	1.67	$	0.37	$	5.18	$	0.96
Diluted	$	1.67	$	0.37	$	5.16	$	0.95
Weighted Average Number of Common Shares Outstanding:
Basic	307.6		308.1		308.7		307.1
Diluted	308.9		309.9		310.1		309.1
Common Stock Dividends Per Share	$	0.375	$	0.250	$	1.125	$	0.750

See accompanying Notes to Consolidated Financial Statements.

3

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In millions)
Net Income	$	606	$	185	$	1,865	$	534
Other Comprehensive Income (Loss):
Derivatives designated as cash flow hedges
Effect of hedge (gains) losses reclassified to income	165		64		420		179
Income taxes on effect of hedge (gains) losses reclassified to income	—		—		—		—
Net effect of hedge (gains) losses reclassified to income	165		64		420		179
Change in fair value of cash flow hedges	(12)		(40)		(506)		(271)
Income taxes on change in fair value of cash flow hedges	—		—		—		—
Net change in fair value of cash flow hedges	(12)		(40)		(506)		(271)
Change in derivatives designated as cash flow hedges, after taxes	153		24		(86)		(92)
Pension and other postretirement plans
(Increase) reduction in unrecognized actuarial losses	—		—		152		3
Income taxes on actuarial changes in plan liabilities	—		—		—		—
(Increase) reduction in unrecognized actuarial losses, net	—		—		152		3
Amortization of net actuarial losses	2		16		10		48
Income taxes on amortization of net actuarial losses	—		—		—		—
Net effect of amortization of net actuarial losses	2		16		10		48
Change in pension and other postretirement plans, after taxes	2		16		162		51
Other Comprehensive Income (Loss)	155		40		76		(41)
Comprehensive Income	761		225		1,941		493
Less: Comprehensive income attributable to noncontrolling interests	91		70		266		240
Comprehensive Income Attributable to Hess Corporation	$	670	$	155	$	1,675	$	253

See accompanying Notes to Consolidated Financial Statements.

4

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
	2022		2021
	(In millions)
Cash Flows From Operating Activities
Net income	$	1,865	$	534
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Gains) losses on asset sales, net	(25)		(29)
Depreciation, depletion and amortization	1,199		1,130
Impairment and other	54		147
Exploratory dry hole costs	19		11
Exploration lease impairment	14		15
Pension settlement loss	2		5
Stock compensation expense	66		61
Noncash (gains) losses on commodity derivatives, net	383		152
Provision for deferred income taxes and other tax accruals	243		79
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(500)		(533)
(Increase) decrease in inventories	(55)		97
Increase (decrease) in accounts payable and accrued liabilities	37		169
Increase (decrease) in taxes payable	(361)		278
Changes in other operating assets and liabilities	(249)		(125)
Net cash provided by (used in) operating activities	2,692		1,991
Cash Flows From Investing Activities
Additions to property, plant and equipment - E&P	(1,755)		(1,118)
Additions to property, plant and equipment - Midstream	(177)		(120)
Proceeds from asset sales, net of cash sold	28		427
Other, net	(4)		(4)
Net cash provided by (used in) investing activities	(1,908)		(815)
Cash Flows From Financing Activities
Net borrowings (repayments) of debt with maturities of 90 days or less	(61)		(32)
Debt with maturities of greater than 90 days:
Borrowings	420		750
Repayments	(510)		(508)
Cash dividends paid	(350)		(234)
Common stock acquired and retired	(340)		—
Proceeds from sale of Class A shares of Hess Midstream LP	146		70
Noncontrolling interests, net	(430)		(589)
Employee stock options exercised	44		75
Payments on finance lease obligations	(5)		(7)
Other, net	(27)		(21)
Net cash provided by (used in) financing activities	(1,113)		(496)
Net Increase (Decrease) in Cash and Cash Equivalents	(329)		680
Cash and Cash Equivalents at Beginning of Year	2,713		1,739
Cash and Cash Equivalents at End of Period	$	2,384	$	2,419

See accompanying Notes to Consolidated Financial Statements.

5

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CONSOLIDATED EQUITY (UNAUDITED)

	Common Stock		Capital in Excess of Par		Retained Earnings		Accumulated Other Comprehensive Loss		Total Hess Stockholders' Equity		Noncontrolling Interests		Total Equity
For the Three Months Ended September 30, 2022
Balance at July 1, 2022	$	310	$	6,236	$	1,075	$	(485)	$	7,136	$	622	$	7,758
Net income	—		—		515		—		515		91		606
Other comprehensive income (loss)	—		—		—		155		155		—		155
Share-based compensation	—		20		—		—		20		—		20
Dividends on common stock	—		—		(117)		—		(117)		—		(117)
Common stock acquired and retired	(2)		(29)		(119)		—		(150)		—		(150)
Noncontrolling interests, net	—		—		—		—		—		(78)		(78)
Balance at September 30, 2022	$	308	$	6,227	$	1,354	$	(330)	$	7,559	$	635	$	8,194
For the Three Months Ended September 30, 2021
Balance at July 1, 2021	$	310	$	5,859	$	155	$	(836)	5,488		$	1,044	$	6,532
Net income	—		—		115		—		115		70		185
Other comprehensive income (loss)	—		—		—		40		40		—		40
Share-based compensation	—		16		—		—		16		—		16
Dividends on common stock	—		—		(78)		—		(78)		—		(78)
Repurchase of Class B units of Hess Midstream Operations LP	—		28		—		—		28		(390)		(362)
Noncontrolling interests, net	—		—		—		—		—		(77)		(77)
Balance at September 30, 2021	$	310	$	5,903	$	192	$	(796)	$	5,609	$	647	$	6,256
For the Nine Months Ended September 30, 2022
Balance at January 1, 2022	$	310	$	6,017	$	379	$	(406)	$	6,300	$	726	$	7,026
Net income	—		—		1,599		—		1,599		266		1,865
Other comprehensive income (loss)	—		—		—		76		76		—		76
Share-based compensation	2		110		—		—		112		—		112
Dividends on common stock	—		—		(350)		—		(350)		—		(350)
Sale of Class A shares of Hess Midstream LP	—		130		—		—		130		88		218
Repurchase of Class B units of Hess Midstream Operations LP	—		32		—		—		32		(215)		(183)
Common stock acquired and retired	(4)		(62)		(274)		—		(340)		—		(340)
Noncontrolling interests, net	—		—		—		—		—		(230)		(230)
Balance at September 30, 2022	$	308	$	6,227	$	1,354	$	(330)	$	7,559	$	635	$	8,194
For the Nine Months Ended September 30, 2021
Balance at January 1, 2021	$	307	$	5,684	$	130	$	(755)	5,366		$	969	$	6,335
Net income	—		—		294		—		294		240		534
Other comprehensive income (loss)	—		—		—		(41)		(41)		—		(41)
Share-based compensation	3		135		—		—		138		—		138
Dividends on common stock	—		—		(232)		—		(232)		—		(232)
Sale of Class A shares of Hess Midstream LP	—		56		—		—		56		41		97
Repurchase of Class B units of Hess Midstream Operations LP	—		28		—		—		28		(390)		(362)
Noncontrolling interests, net	—		—		—		—		—		(213)		(213)
Balance at September 30, 2021	$	310	$	5,903	$	192	$	(796)	$	5,609	$	647	$	6,256

See accompanying Notes to Consolidated Financial Statements.

6

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 September 30, 2022 and December 31, 2021, the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, and consolidated cash flows for the nine months ended September 30, 2022 and 2021.  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, 2021.

 2.  Inventories

Inventories consisted of the following:

	September 30, 2022		December 31, 2021
	(In millions)
Crude oil and natural gas liquids	$	96	$	52
Materials and supplies	182		171
Total Inventories	$	278	$	223

3.  Property, Plant and Equipment

Capitalized Exploratory Well Costs:  

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves during the nine months ended September 30, 2022 (in millions):

Balance at January 1, 2022	$	681
Additions to capitalized exploratory well costs pending the determination of proved reserves	267
Reclassifications to wells, facilities and equipment based on the determination of proved reserves	(93)
Balance at September 30, 2022	$	855

The preceding table excludes well costs of $19 million incurred and expensed during the first nine months of 2022. Additions to capitalized exploratory well costs pending the determination of proved reserves are related to wells drilled on the Stabroek Block (Hess 30%), offshore Guyana, the Huron-1 well (Hess 40%) in the Gulf of Mexico, and the Zanderij-1 well on Block 42 (Hess 33%), offshore Suriname. Reclassifications to wells, facilities and equipment based on the determination of proved reserves resulted from the sanction of the Yellowtail Field development project, the fourth sanctioned project on the Stabroek Block.

At September 30, 2022, exploratory well costs capitalized for greater than one year following completion of drilling of $497 million was comprised of the following:

Guyana: Approximately 90% of the capitalized well costs in excess of one year relate to successful exploration wells where hydrocarbons were encountered on the Stabroek Block.  The operator plans further appraisal drilling on the Block and is conducting pre-development planning for additional phases of development.

Joint Development Area (JDA):  Approximately 8% 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 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 2% 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 one successful exploration well.  Subsurface evaluation and pre-development studies are ongoing.

7

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4.  Hess Midstream LP

At September 30, 2022, Hess Midstream LP (Hess Midstream), a variable interest entity that is fully consolidated by Hess Corporation, had liabilities totaling $3,053 million (December 31, 2021: $2,694 million) that are on a nonrecourse basis to Hess Corporation, while Hess Midstream assets available to settle the obligations of Hess Midstream included cash and cash equivalents totaling $3 million (December 31, 2021: $2 million), property, plant and equipment with a carrying value of $3,160 million (December 31, 2021: $3,125 million) and an equity-method investment in the Little Missouri 4 (LM4) gas processing plant of $98 million (December 31, 2021: $102 million).

LM4 is a 200 million standard cubic feet per day gas processing plant located south of the Missouri River in McKenzie County, North Dakota, that was constructed as part of a 50/50 joint venture between Hess Midstream and Targa Resources Corp. Hess Midstream has a natural gas processing agreement with LM4 under which it pays a processing fee and reimburses LM4 for its proportionate share of electricity costs. The processing fees included in Operating costs and expenses in the Statement of Consolidated Income for the three and nine months ended September 30, 2022 were $7 million and $16 million, respectively, compared with $8 million and $22 million for the three and nine months ended September 30, 2021, respectively.

In April 2022, Hess Midstream LP completed an underwritten public equity offering of approximately 10.2 million Hess Midstream LP Class A shares held by a subsidiary of Hess Corporation and an affiliate of Global Infrastructure Partners (GIP). We received net proceeds of $146 million from the public offering. The transaction resulted in an increase in Capital in excess of par and Noncontrolling interests of $130 million and $88 million, respectively. The increase to Noncontrolling interests of $88 million is comprised of $16 million resulting from the change in ownership interest and $72 million from an increase to deferred tax assets resulting from a change in the difference between the carrying amount and tax basis of Hess Midstream LP's investment in Hess Midstream Operations LP (HESM Opco).

Concurrent with the April 2022 public offering, HESM Opco, a consolidated subsidiary of Hess Midstream LP, repurchased approximately 13.6 million HESM Opco Class B units held by a subsidiary of Hess Corporation and an affiliate of GIP for $400 million. HESM Opco issued $400 million in aggregate principal amount of 5.500% fixed-rate senior unsecured notes due 2030 in a private offering to repay borrowings under its revolving credit facility used to finance the repurchase. The transaction resulted in an increase in Capital in excess of par and a decrease in Noncontrolling interests of $32 million, and an increase in deferred tax assets and Noncontrolling interests of $17 million resulting from a change in the difference between the carrying amount and tax basis of Hess Midstream LP's investment in HESM Opco. The $200 million paid to GIP reduced Noncontrolling Interests. We owned an approximate 41% interest in Hess Midstream LP, on a consolidated basis, at September 30, 2022.

In August 2021, HESM Opco repurchased 31.25 million HESM Opco Class B units held by a subsidiary of Hess Corporation and an affiliate of GIP for $750 million. HESM Opco issued $750 million in aggregate principal amount of 4.250% fixed-rate senior unsecured notes due 2030 in a private offering to finance the repurchase. The transaction resulted in an increase in Capital in Excess of Par and a decrease in Noncontrolling Interests of $28 million, and an increase in deferred tax assets and Noncontrolling Interests of $15 million resulting from a change in the difference between the carrying amount and tax basis of Hess Midstream LP's investment in HESM Opco. The $375 million paid to GIP reduced Noncontrolling Interests.

In March 2021, Hess Midstream LP completed an underwritten public equity offering of 6.9 million Hess Midstream LP Class A shares held by a subsidiary of Hess Corporation and an affiliate of GIP. We received net proceeds of $70 million from the public offering. The transaction resulted in an increase in Capital in excess of par and Noncontrolling interests of $56 million and $41 million, respectively. The increase to Noncontrolling interests of $41 million is comprised of $14 million resulting from the change in ownership interest and $27 million from an increase to deferred tax assets resulting from a change in the difference between the carrying amount and tax basis of Hess Midstream LP's investment in HESM Opco.

8

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5.  Accrued Liabilities

Accrued Liabilities consisted of the following:

	September 30, 2022		December 31, 2021
	(In millions)
Accrued capital expenditures	$	518	$	479
Accrued operating and marketing expenditures	490		462
Accrued payments to royalty and working interest owners	262		253
Current portion of asset retirement obligations	215		185
Accrued interest on debt	111		138
Accrued compensation and benefits	89		124
Other accruals	18		69
Total Accrued Liabilities	$	1,703	$	1,710

6.  Debt

Debt – Hess Corporation:

Credit facility: In July 2022, Hess Corporation replaced its $3.5 billion revolving credit facility expiring in May 2024 with a new $3.25 billion revolving credit facility maturing in July 2027. The new facility, which is fully undrawn, can be used for borrowings and letters of credit. Borrowings on the new facility will generally bear interest at 1.400% above the Secured Overnight Financing Rate (SOFR), though the interest rate is subject to adjustment based on the credit rating of the Corporation's senior, unsecured, non-credit enhanced long-term debt. The new credit agreement replaced the London Interbank Offered Rate (LIBOR) as the benchmark interest rate with SOFR and has substantially similar terms to the prior agreement, including covenants.

Term loan: In February 2022, we repaid the remaining $500 million outstanding under our $1.0 billion term loan previously scheduled to mature in March 2023. We repaid the first $500 million in July 2021.

Debt – Midstream:

Term loan and credit facility: In July 2022, HESM Opco amended and restated its credit agreement for its $1.4 billion senior secured syndicated credit facilities, consisting of a $1.0 billion revolving credit facility and a $400 million term loan facility, resulting in an incremental $20 million outstanding on the term loan facility at closing. The amended and restated credit agreement, among other things, extended the maturity date from December 2024 to July 2027, increased the accordion feature to up to an additional $750 million, which does not represent a lending commitment from the lenders, and replaced LIBOR as the benchmark interest rate with SOFR. Borrowings under the new term loan facility will generally bear interest at SOFR plus an applicable margin ranging from 1.650% to 2.550%, while the applicable margin for the new syndicated revolving credit facility ranges from 1.375% to 2.050%. The amended and restated credit agreement has substantially similar terms to the prior agreement, including commitment amounts, guarantees, secured collateral and covenants.

Senior unsecured fixed-rate public notes: In April 2022, HESM Opco issued $400 million in aggregate principal amount of 5.500% fixed-rate senior unsecured notes due 2030 in a private offering to repay borrowings under its revolving credit facility used to finance the repurchase of approximately 13.6 million HESM Opco Class B units held by a subsidiary of Hess Corporation and an affiliate of GIP. The covenants of the 5.500% fixed-rate senior unsecured notes are substantially similar to the terms of the other existing HESM Opco fixed-rate senior unsecured notes.

9

PART I - FINANCIAL INFORMATION (CONT’D.)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7.  Revenue

Revenue from contracts with customers on a disaggregated basis was as follows (in millions):

	Exploration and Production										Midstream		Eliminations		Total
	United States		Guyana		Malaysia and JDA		Other (a)		E&P Total
Three Months Ended September 30, 2022
Sales of our net production volumes:
Crude oil revenue (b)	$	895	$	838	$	34	$	97	$	1,864	$	—	$	—	$	1,864
Natural gas liquids revenue	191		—		—		—		191		—		—		191
Natural gas revenue	145		—		150		6		301		—		—		301
Sales of purchased oil and gas	889		20		—		22		931		—		—		931
Intercompany revenue	—		—		—		—		—		335		(335)		—
Total sales	2,120		858		184		125		3,287		335		(335)		3,287
Other operating revenues (c)	(98)		(59)		—		(8)		(165)		—		—		(165)
Total sales and other operating revenues	$	2,022	$	799	$	184	$	117	$	3,122	$	335	$	(335)	$	3,122
Three Months Ended September 30, 2021
Sales of our net production volumes:
Crude oil revenue	$	654	$	214	$	2	$	104	$	974	$	—	$	—	$	974
Natural gas liquids revenue	143		—		—		—		143		—		—		143
Natural gas revenue	77		—		143		2		222		—		—		222
Sales of purchased oil and gas	457		4		—		23		484		—		—		484
Intercompany revenue	—