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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 Fee Required
For the fiscal year ended December 31, 1995
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 No Fee Required
For the transition period from to
COMMISSION FILE NUMBER 1-1204
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AMERADA 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, N.Y. 10036
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code, is (212) 997-8500)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE
ON WHICH REGISTERED
Common Stock (par value $1.00) New York Stock Exchange
Toronto Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
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 X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of voting stock held by non-affiliates of the
Registrant amounted to $4,097,000,000 as of February 29, 1996.
At February 29, 1996, 92,998,755 shares of Common Stock were outstanding.
Certain items in Parts I and II incorporate information by reference from
the 1995 Annual Report to Stockholders and Part III is incorporated by reference
from the Proxy Statement for the annual meeting of stockholders to be held on
May 1, 1996.
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PART I
ITEM 1. BUSINESS
Amerada Hess Corporation (the "Registrant") was incorporated in 1920 in the
State of Delaware. The Registrant and its subsidiaries (collectively referred to
herein as the "Corporation") engage in the exploration for and the production,
purchase, transportation and sale of crude oil and natural gas. The Corporation
also manufactures, purchases, transports and markets refined petroleum products.
EXPLORATION AND PRODUCTION
The Corporation's exploration and production activities are located
primarily in the United States, Canada, the United Kingdom, Norway and Gabon.
The Corporation also conducts exploration and/or production activities in Abu
Dhabi, Denmark, Namibia, Thailand and Indonesia. Of the Company's proved
reserves (on a barrel of oil equivalent basis), 34% are located in the United
States, 51% are located in the United Kingdom and Norwegian sectors of the North
Sea, 10% are located in Canada and the remainder are located in Gabon, Abu Dhabi
and Thailand. Worldwide crude oil and natural gas liquids production amounted to
260,460 barrels per day in 1995 compared with 250,520 barrels per day in 1994.
Worldwide natural gas production was 884,131 Mcf per day in 1995 compared with
846,118 Mcf per day in 1994.
At December 31, 1995, the Corporation has 695 million barrels of proved
crude oil and natural gas liquids reserves compared with 644 million barrels at
the end of 1994. Proved natural gas reserves are 2,481 million Mcf at December
31, 1995 compared with 2,581 million Mcf at December 31, 1994. The Corporation
has an inventory of drillable prospects primarily in the United States, Canada
and the United Kingdom and Norwegian sectors of the North Sea.
The Corporation is currently offering for sale its wholly-owned subsidiary,
Amerada Hess Canada Ltd., as well as certain United States properties
representing approximately 20% of United States production and 15% of proved
United States crude oil and natural gas reserves. The Corporation also
anticipates the sale of its remaining interest in Abu Dhabi in the first half of
1996 and expects that certain non-core North Sea properties may be sold.
UNITED STATES. The Corporation operates principally offshore in the Gulf
of Mexico and onshore in the states of Texas, Louisiana and North Dakota. During
1995, 24% of the Corporation's crude oil and natural gas liquids production and
45% of its natural gas production were from United States operations.
The table below sets forth the Corporation's average daily net production
by area in the United States:
1995 1994
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CRUDE OIL, INCLUDING CONDENSATE AND
NATURAL GAS LIQUIDS (BARRELS PER DAY)
Texas........................................................ 23,256 26,237
North Dakota................................................. 12,414 13,158
Gulf of Mexico............................................... 12,114 14,349
Louisiana.................................................... 3,592 2,331
Alaska*...................................................... 3,133 3,735
Other........................................................ 8,497 7,792
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Total................................................ 63,006 67,602
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* Sold in the fourth quarter of 1995.
NATURAL GAS (MCF PER DAY)
Gulf of Mexico............................................... 186,427 217,203
Louisiana.................................................... 54,387 51,727
North Dakota................................................. 48,228 46,530
Texas........................................................ 37,077 39,973
New Mexico................................................... 23,297 23,276
Oklahoma..................................................... 21,491 20,986
California................................................... 15,144 19,623
Other........................................................ 15,530 7,785
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Total................................................ 401,581 427,103
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CANADA. The Corporation, through its wholly-owned Canadian subsidiary,
Amerada Hess Canada Ltd., conducts operations in the Provinces of Alberta and
British Columbia. The Corporation's net crude oil and natural gas liquids
production in Canada amounted to 11,396 barrels per day in 1995 compared to
12,390 barrels per day in 1994, and its natural gas production increased to
215,500 Mcf per day in 1995 from 185,856 Mcf per day in 1994.
UNITED KINGDOM. The Corporation's activities in the United Kingdom are
conducted by its wholly-owned British subsidiary, Amerada Hess Limited. During
1995, 55% of the Corporation's crude oil and natural gas liquids production and
27% of its natural gas production were from United Kingdom operations.
The table below sets forth the Corporation's average daily net production
in the United Kingdom by field and the Corporation's interest in each at
December 31, 1995:
PRODUCING FIELD INTEREST 1995 1994
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CRUDE OIL, INCLUDING CONDENSATE AND
NATURAL GAS LIQUIDS (BARRELS PER DAY)
Scott.................................. 34.95% 64,209 59,161
Beryl/Ness............................. 20.00 18,442 18,687
Ivanhoe/Rob Roy/Hamish................. 42.08 18,227 24,913
Fife................................... 85.00 13,123 --
Arbroath/Montrose...................... 28.21 10,484 9,823
Hudson................................. 28.46 9,813 8,413
Other.................................. Various 8,031 7,802
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Total............................. 142,329 128,799
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NATURAL GAS (MCF PER DAY)
Beryl/Ness............................. 20.00% 46,725 43,329
Leman.................................. 21.74 46,241 28,663
Everest/Lomond......................... 18.67/16.67 42,491 41,685
Scott.................................. 34.95 28,913 26,092
Indefatigable.......................... 23.08 27,409 20,855
Anglia................................. 29.29 18,601 19,538
Davy/Bessemer.......................... 27.78/23.08 11,812 --
Other.................................. Various 17,115 28,580
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Total............................. 239,307 208,742
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Crude oil production commenced from the Fife Field in the third quarter of
1995. Natural gas production commenced from the Davy and Bessemer Fields in the
fourth quarter of 1995.
NORWAY. The Corporation's activities in Norway are conducted through its
wholly-owned Norwegian subsidiary, Amerada Hess Norge A/S. The Corporation's
Norwegian operations accounted for crude oil and natural gas liquids production
of 26,990 and 25,599 net barrels per day in 1995 and 1994, respectively.
Approximately 60% of this production is from the Corporation's 28.09% interest
in the Valhall Field.
GABON. The Corporation has a 5.5% interest in the Rabi Kounga oil field
onshore Gabon. The Corporation's share of production from Gabon averaged 9,468
and 8,746 net barrels of crude oil per day in 1995 and 1994, respectively.
REFINING AND MARKETING
The Corporation's refining facilities are located in St. Croix, United
States Virgin Islands and Port Reading, New Jersey. Total crude runs averaged
377,000 barrels per day in 1995 and 388,000 barrels per day in 1994. The
Corporation's production supplied approximately 7% of its crude runs. The
balance came from various suppliers under contracts of one year or less and
through spot purchases on the open market. Approximately 78% of the refined
products marketed in 1995 was obtained from the Corporation's refineries. The
Corporation purchased the balance from others under short-term supply contracts
and by spot purchases
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from various sources. Sales of refined products averaged 487,000 barrels per day
in 1995 compared with 468,000 barrels per day in 1994.
HESS OIL VIRGIN ISLANDS REFINERY. The Corporation owns and operates a
petroleum refinery in St. Croix, United States Virgin Islands through its
wholly-owned subsidiary, Hess Oil Virgin Islands Corp. ("HOVIC"). In 1995,
refined products produced were approximately 68% gasoline and distillates, 13%
refinery feedstocks and the remainder principally residual fuel oil. In addition
to crude distillation capacity, the refinery has a fluid catalytic cracking
unit, which is currently operated at 110,000 barrels per day. The Corporation
expects to increase the production capacity of the catcracker to 125,000 barrels
per day in late 1996 or early 1997. The refinery also has catalytic reforming
units, vacuum distillation capacity, visbreakers, a sulfolane unit, a penex
unit, distillate desulfurizers, vacuum gas oil desulfurizers and sulfur recovery
facilities. HOVIC has approximately 31 million barrels of storage capacity.
The refinery has the capability to process a variety of crude oils,
including high-sulfur crudes. The refinery has a 60-foot-deep harbor and docking
facilities for ten ocean-going tankers. The refinery's harbor accommodates very
large crude carriers after a portion of their crude oil cargo is lightered at
the Corporation's storage and transshipment facility in Saint Lucia, which has a
90-foot-deep harbor. The Saint Lucia facility has approximately 9 million
barrels of storage capacity.
PORT READING FACILITY. The Corporation owns and operates a fluid catalytic
cracking facility in Port Reading, New Jersey, which processes vacuum gas oil
and operates at a rate of approximately 54,000 barrels per day. The Port Reading
facility primarily produces gasoline and heating oil.
MARKETING. The Corporation markets refined petroleum products principally
on the East and Gulf Coasts of the United States to the motoring public,
wholesale distributors, industrial and commercial users, other petroleum
companies, commercial airlines, governmental agencies and public utilities.
At December 31, 1995, the Corporation has 551 HESS(R) gasoline stations of
which approximately 82% are operated by the Corporation. Most of the
Corporation's stations are concentrated in highly-populated, urban areas,
principally in New York, New Jersey and Florida. Of the Corporation's stations,
166 have HESS MART(R) convenience stores. The Corporation owns in fee
approximately 75% of the properties on which its stations are located. The
Corporation also has 42 terminals located throughout its marketing area, with
aggregate storage capacity of approximately 47 million barrels.
COMPETITION AND MARKET CONDITIONS
The petroleum industry is highly competitive. The Corporation encounters
competition from numerous companies in each of its activities, particularly in
acquiring rights to explore for crude oil and natural gas and in the purchasing
and marketing of refined products. Many competitors are larger and have
substantially greater resources than the Corporation. The Corporation is also in
competition with producers and marketers of other forms of energy.
The petroleum business involves large-scale capital expenditures and
risk-taking. In the search for new oil and gas reserves, long lead times are
often required from successful exploration to subsequent production. Operations
in the petroleum industry depend on a depleting natural resource. The number of
areas where it can be expected that hydrocarbons will be discovered in
commercial quantities is constantly diminishing and exploration risks are high.
Areas where hydrocarbons may be found are often in remote locations or offshore
where exploration and development activities are capital intensive and operating
costs are high. In addition, low crude oil prices have reduced the number of
areas from which hydrocarbons can be economically produced.
The major foreign oil producing countries, including members of the
Organization of Petroleum Exporting Countries ("OPEC"), exert considerable
influence over the supply and price of crude oil and refined petroleum products.
Their ability or inability to agree on a common policy on rates of production,
oil prices, and other matters has a significant impact on the oil market and the
Corporation. The derivatives markets are also important in influencing the
prices of crude oil, natural gas and refined products. The Corporation cannot
predict the extent to which future market conditions may be affected by OPEC,
the derivatives markets or other external influences.
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Market conditions continue to affect the Corporation's earnings. The
Corporation's refining and marketing operations incurred a loss in 1995 after
realizing a profit in 1994. While gasoline margins improved in 1995, this
improvement was more than offset by lower distillate and residual fuel oil
margins. While the average refined product selling price increased in 1995, the
cost of purchased crude oil and refined products increased by a greater amount.
The selling prices of all refined products, particularly gasolines, continue to
be subject to competitive industry conditions. Supply and demand factors,
including the effects of weather, will continue to affect all refined product
markets.
The Corporation's exploration and production operations were profitable in
1995, but continue to be impacted by volatility in the selling prices of crude
oil and natural gas. Average worldwide crude oil selling prices increased in
1995. The available supply of natural gas in the United States continued to
exceed demand in 1995, resulting in lower average selling prices. Natural gas
selling prices recovered somewhat in late 1995 and early 1996, but the
Corporation is unable to predict how long this trend will continue.
OTHER ITEMS
The Corporation's operations may be affected by federal, state, local,
territorial and foreign laws and regulations relating to tax increases and
retroactive tax claims, expropriation of property, cancellation of contract
rights, and changes in import regulations, as well as other political
developments. The Corporation has been affected by certain of these events in
various countries in which it operates. The Corporation markets motor fuels
through lessee-dealers and wholesalers in certain states where legislation
prohibits producers or refiners of crude oil from directly engaging in retail
marketing of motor fuels. Similar legislation is periodically proposed in the
U.S. Congress and in various other states. The Corporation, at this time, cannot
predict the effect of any of the foregoing on its future operations.
Compliance with the various environmental and pollution control regulations
imposed by federal, state and local governments is not expected to have a
materially adverse effect on the Corporation's earnings and competitive position
within the industry. However, the cost of such compliance is expected to
increase in the future. Capital expenditures for facilities, primarily to comply
with federal, state and local environmental standards, were $15 million in 1995
and the Corporation anticipates comparable capital expenditures in 1996. In
addition, the Corporation expended $15 million in 1995 for environmental
remediation, with a comparable amount anticipated for 1996.
The number of persons employed by the Corporation averaged 9,574 in 1995
and 9,858 in 1994.
Additional operating and financial information relating to the business and
properties of the Corporation appears in the text on pages 6 and 9 under the
heading "United States Exploration and Production," on pages 10, 13 and 14 under
the heading "International Exploration and Production," on pages 17 and 18 under
the heading "Refining and Marketing," on pages 21 through 25 under the heading
"Financial Review" and on pages 26 through 51 of the accompanying 1995 Annual
Report to Stockholders, which information is incorporated herein by reference.*
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* Except as to information specifically incorporated herein by reference under
Items 1, 2, 5, 6, 7 and 8, no other information or data appearing in the 1995
Annual Report to Stockholders is deemed to be filed with the Securities and
Exchange Commission (SEC) as part of this Annual Report on Form 10-K, or
otherwise subject to the SEC's regulations or the liabilities of Section 18 of
the Securities Exchange Act of 1934, as amended.
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ITEM 2. PROPERTIES
Reference is made to Item 1 and the operating and financial information
relating to the business and properties of the Corporation, which is
incorporated in Item 1 by reference.
Additional information relating to the Corporation's oil and gas operations
follows.
1. OIL AND GAS RESERVES
The Corporation's net proved oil and gas reserves at the end of 1995, 1994
and 1993 are presented under Supplementary Oil and Gas Data in the accompanying
1995 Annual Report to Stockholders, which has been incorporated herein by
reference.
During 1995, the Corporation provided oil and gas reserve estimates for
1994 to the Department of Energy. Such estimates are compatible with the
information furnished to the SEC on Form 10-K, although not necessarily directly
comparable due to the requirements of the individual requests. There were no
differences in excess of 5%.
The Corporation has no long-term contracts or agreements to supply fixed
quantities of its crude oil production. Approximately 65% of the Corporation's
1995 natural gas sales were made under long-term contracts to various
purchasers. Contractual commitments in 1996 (which are expected to be comparable
to 1995) will be filled from the Corporation's production and from contractual
purchases.
2. AVERAGE SELLING PRICES AND AVERAGE PRODUCTION COSTS
1995 1994 1993
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Average selling prices (Note A)
Crude oil, including condensate and natural
gas liquids (per barrel)
United States.......................... $ 15.82 $ 15.43 $ 17.40
Canada................................. 15.77 15.94 16.30
Europe................................. 17.05 15.96 17.04
Other areas............................ 16.79 15.45 16.41
Average................................ 16.68 15.78 17.05
Natural gas (per Mcf)
United States.......................... $ 1.70 $ 1.91 $ 2.11
Canada................................. 1.02 1.36 1.43
Europe................................. 2.05 2.04 1.83
Average................................ 1.67 1.86 1.98
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Note A: Includes inter-company transfers valued at approximate market
prices and the effect of the Corporation's hedging activities.
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1995 1994 1993
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Average production (lifting) costs per barrel of
production (Note B)
United States.......................... $ 4.29 $ 4.10 $ 4.06
Canada................................. 2.65 2.98 3.21
Europe................................. 4.34 4.37 4.89
Other areas............................ 3.41 3.08 4.15
Average................................ 4.09 4.06 4.31
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Note B: Production (lifting) costs consist of amounts incurred to operate
and maintain the Corporation's producing oil and gas wells and related equipment
and facilities, including severance and other related production taxes. The
average production (lifting) costs per barrel of production reflect the crude
oil equivalent of natural gas production converted on the basis of relative
energy content.
The foregoing tabulation does not include substantial costs and charges
applicable to finding and developing proved oil and gas reserves, nor does it
reflect significant outlays for related general and administrative expenses,
interest expense and income taxes.
3. GROSS AND NET DEVELOPED ACREAGE AND PRODUCTIVE WELLS AT DECEMBER 31, 1995
DEVELOPED
ACREAGE PRODUCTIVE WELLS (NOTE A)
APPLICABLE TO -------------------------------------
PRODUCTIVE WELLS
(IN THOUSANDS) OIL GAS
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GROSS NET GROSS NET GROSS NET
------ ------ ------- ------ ------ ------
United States...................... 3,013 712 13,486 1,604 1,955 786
Canada............................. 727 324 1,949 483 1,047 345
Europe............................. 586 125 335 48 142 29
Other areas........................ 82 23 146 19 - -
------ ------ ------- ------ ------ ------
Total.................... 4,408 1,184 15,916 2,154 3,144 1,160
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Note A: Includes multiple completion wells (wells producing from different
formations in the same bore hole) totaling 173 gross wells and 109 net wells.
4. GROSS AND NET UNDEVELOPED ACREAGE AT DECEMBER 31, 1995
UNDEVELOPED
ACREAGE
(IN THOUSANDS)
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GROSS NET
United States................................ 2,186 1,440
Canada....................................... 1,359 799
Europe....................................... 8,112 2,702
Other areas.................................. 9,920 2,370
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Total.............................. 21,577 7,311
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5. NUMBER OF NET EXPLORATORY AND DEVELOPMENT WELLS DRILLED
NET EXPLORATORY WELLS NET DEVELOPMENT WELLS
---------------------- ----------------------
1995 1994 1993 1995 1994 1993
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Productive wells
United States................. 20 10 25 25 27 43
Canada........................ 3 9 9 12 13 10
Europe........................ 3 5 6 10 6 3
Other areas................... - 1 - 1 1 1
---- ---- ---- ---- ---- ----
Total.................... 26 25 40 48 47 57
---- ---- ---- ---- ---- ----
Dry holes
United States................. 24 17 23 3 - 1
Canada........................ 14 5 10 2 1 2
Europe........................ 6 1 1 - - -
Other areas................... 1 - - - - -
---- ---- ---- ---- ---- ----
Total.................... 45 23 34 5 1 3
---- ---- ---- ---- ---- ----
Total.............................. 71 48 74 53 48 60
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6. NUMBER OF WELLS IN PROCESS OF DRILLING AT DECEMBER 31, 1995
GROSS NET
WELLS WELLS
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United States.................................... 30 10
Canada........................................... 14 10
Europe........................................... 10 2
Other areas...................................... 1 -
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Total.................................. 55 22
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7. NUMBER OF WATERFLOODS AND PRESSURE MAINTENANCE PROJECTS IN PROCESS OF
INSTALLATION AT
DECEMBER 31, 1995 -- Five (four in the United States and one in Canada)
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ITEM 3. LEGAL PROCEEDINGS
The Registrant is under investigation by a grand jury in, and by the United
States Attorney's Office for, the District of New Jersey, and is also under
investigation by a grand jury in, and by the United States Attorney's Office
for, the District of Arizona and by the Environmental Crimes Unit of the United
States Department of Justice. The focus of these investigations concerns the
storage and shipment of allegedly hazardous waste. The waste at issue was
shipped from the HOVIC refinery to various locations in the United States,
including Arizona. One question in the investigation is whether criminal
violations of the Resource Conservation and Recovery Act resulted from the
transportation of hazardous waste without designating the waste as hazardous and
from the transportation of that waste to a site that did not have a permit to
receive hazardous waste. Another subject of the investigation is whether the
Registrant and others failed to report promptly the release of a hazardous
substance as required by law. The investigation also includes whether false
statements regarding the catalyst were made by representatives of the Registrant
to government officials. It is not possible at this time for Registrant to state
what the outcome of these investigations will be, or, if an indictment of
Registrant and HOVIC were to be returned or any other proceedings arising out of
the investigations were to be commenced against the Registrant or HOVIC, what
other claims would be asserted or what relief would be sought.
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On April 27, 1993, the Texas Natural Resource Conservation Commission
("TNRCC", then known as the Texas Water Commission) notified the Registrant of
alleged violation of the Texas Water Code as a result of alleged discharges of
hydrocarbon compounds into the groundwater in the vicinity of the Registrant's
terminal in Corpus Christi, Texas. Penalties provided for these violations
include administrative penalties not to exceed $10,000 per day. The Registrant
has undertaken a groundwater assessment, an interim correction measures program
and other appropriate responses to these allegations. On December 9, 1994, the
Executive Director of the TNRCC forwarded a Notice of Executive Director's
Preliminary Report and Petition for a TNRCC Order Assessing Administrative
Penalties and Requiring Certain Actions of Amerada Hess Corporation. This Notice
recommended a $542,400 penalty be assessed and the Registrant be ordered to
undertake remedial actions at the Corpus Christi terminal. The Registrant is
engaging in settlement discussions with the TNRCC regarding this matter.
On June 21, 1994, Region II of the EPA commenced an administrative
proceeding under Section 325 of the Emergency Planning and Community
Right-to-Know Act ("EPCRA") against HOVIC, alleging violations of Section 313 of
EPCRA arising out of HOVIC's alleged failure to comply with certain reporting
requirements relating to toxic chemicals manufactured or otherwise used at
HOVIC's refinery. The proceeding seeks civil penalties totaling $252,000 for the
alleged violations. HOVIC is engaging in settlement discussions with the EPA
regarding this matter.
The Corporation periodically receives notices from the EPA that the
Corporation is a "potentially responsible party" under the Superfund legislation
with respect to various waste disposal sites. Under this legislation, all
potentially responsible parties are jointly and severally liable. For certain
sites, EPA's claims or assertions of liability against the Corporation relating
to these sites have not been fully developed. With respect to the remaining
sites, EPA's claims have been settled, or a proposed settlement is under
consideration, in all cases for amounts which are not material. The ultimate
impact of these proceedings, and of any related proceedings by private parties,
on the business or accounts of the Corporation cannot be predicted at this time
due to the large number of other potentially responsible parties and the
speculative nature of clean-up cost estimates, but is not expected to be
material.
The Corporation is from time to time involved in other judicial and
administrative proceedings, including proceedings relating to other
environmental matters. Although the ultimate outcome of these proceedings cannot
be ascertained at this time and some of them may be resolved adversely to the
Corporation, no such proceeding is required to be disclosed under applicable
rules of the Securities and Exchange Commission. In management's opinion, based
upon currently known facts and circumstances, such proceedings in the aggregate
will not have a material adverse effect on the financial condition of the
Corporation.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1995, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table presents information as of February 1, 1996 regarding
executive officers of the Registrant:
YEAR
INDIVIDUAL
BECAME AN
EXECUTIVE
NAME AGE OFFICE HELD* OFFICER
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John B. Hess............ 41 Chairman of the Board, Chief Executive 1983
Officer and Director
W. S. H. Laidlaw........ 40 President, Chief Operating Officer and 1986
Director
Leon Hess............... 81 Chairman of the Executive Committee and 1969
Director
H. W. McCollum.......... 82 Chairman of the Finance Committee and 1969
Director
J. Barclay Collins II... 51 Executive Vice President, General Counsel and 1986
Director
Michael W. Press........ 48 Executive Vice President and Director 1994
John Y. Schreyer........ 56 Executive Vice President, Chief Financial 1990
Officer and Director
Alan A. Bernstein....... 51 Senior Vice President 1987
Marco B. Bianchi........ 56 Senior Vice President and Director 1986
F. Lamar Clark.......... 62 Senior Vice President 1990
Neal Gelfand............ 51 Senior Vice President 1980
Daniel F. McCarthy...... 51 Senior Vice President 1995
Charles H. Norz......... 58 Senior Vice President 1982
Benedict J. O'Bryan..... 58 Senior Vice President 1991
Lawrence H. Ornstein.... 44 Senior Vice President 1995
Rene L. Sagebien........ 55 Senior Vice President 1990
Gerald A. Jamin......... 54 Treasurer 1985
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* All officers referred to herein hold office in accordance with the
By-Laws until the first meeting of the Directors following the annual meeting of
stockholders of the Registrant, and until their successors shall have been duly
chosen and qualified. Each of said officers was elected to the office set forth
opposite his name on May 3, 1995, except that Mr. Ornstein was elected to his
present office by the Board of Directors at its regular meeting on December 6,
1995. The first meeting of Directors following the next annual meeting of
stockholders of the Registrant is scheduled to be held May 1, 1996.
Except for Mr. Press, each of the above officers has been employed by the
Registrant in various managerial and executive capacities for more than five
years. Prior to his employment with the Registrant in October 1994, Mr. Press
was a Senior Vice President of BP Oil Company, a unit of The British Petroleum
Company p.l.c.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Information pertaining to the market for the Registrant's Common Stock,
high and low sales prices of the Common Stock in 1995 and 1994, dividend
payments and restrictions thereon and the number of holders of Common Stock is
presented on page 25 (Financial Review), page 33 (Long-Term Debt) and on page 48
(Ten-Year Summary of Financial Data) of the accompanying 1995 Annual Report to
Stockholders, which has been incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
A Ten-Year Summary of Financial Data is presented on pages 46 through 49 of
the accompanying 1995 Annual Report to Stockholders, which has been incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is presented on pages 21 through 25
of the accompanying 1995 Annual Report to Stockholders, which has been
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, including the Report of Ernst &
Young LLP, Independent Auditors, the Supplementary Oil and Gas Data (unaudited)
and the Quarterly Financial Data (unaudited) are presented on pages 25 through
45 of the accompanying 1995 Annual Report to Stockholders, which has been
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to Directors is incorporated herein by reference to
"Election of Directors" from the Registrant's definitive proxy statement for the
annual meeting of stockholders to be held on May 1, 1996.
Information regarding executive officers is included in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is incorporated herein by
reference to "Election of Directors-Executive Compensation and Other
Information," other than information under "Compensation Committee Report on
Executive Compensation" and "Performance Graph" included therein, from the
Registrant's definitive proxy statement for the annual meeting of stockholders
to be held on May 1, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information pertaining to security ownership of certain beneficial owners
and management is incorporated herein by reference to "Election of
Directors-Ownership of Voting Securities by Certain Beneficial Owners" and
"Election of Directors-Ownership of Equity Securities by Management" from the
Registrant's definitive proxy statement for the annual meeting of stockholders
to be held on May 1, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to this item is incorporated herein by reference to
"Election of Directors" from the Registrant's definitive proxy statement for the
annual meeting of stockholders to be held on May 1, 1996.
------------------------
10
12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. AND 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The financial statements filed as part of this Annual Report on
Form 10-K are listed in the accompanying index to financial statements
and schedules.
3. EXHIBITS
3(1) -Restated Certificate of Incorporation of Registrant incorporated by
reference to Exhibit 19 of Form 10-Q of Registrant for the three
months ended September 30, 1988.
3(2) -By-Laws of Registrant incorporated by reference to Exhibit 3(2) of
Form 10-K of Registrant for the fiscal year ended December 31,
1985.
4(1) -Note and Warrant Purchase Agreement, dated June 27, 1991 (including
the form of the Common Stock Purchase Warrant expiring June 27,
2001, included as Exhibit B thereof) incorporated by reference to
Exhibit 4 of Form 10-Q of Registrant for the three months ended
June 30, 1991.
4(2) -Amendment, dated as of May 15, 1992 to the Note and Warrant
Purchase Agreement, dated June 27, 1991 (including the form of the
common stock purchase warrant expiring June 27, 2001, included as
Exhibit B thereof), incorporated by reference to Exhibit 19 of
Form 10-Q of Registrant for the three months ended June 30, 1992.
-Other instruments defining the rights of holders of long-term debt
of Registrant and its consolidated subsidiaries are not being
filed since the total amount of securities authorized under each
such instrument does not exceed 10 percent of the total assets of
Registrant and its subsidiaries on a consolidated basis.
Registrant agrees to furnish to the Commission a copy of any
instruments defining the rights of holders of long-term debt of
Registrant and its subsidiaries upon request.
10(1) -Extension and Amendment Agreement between the Government of the
Virgin Islands and Hess Oil Virgin Islands Corp. incorporated by
reference to Exhibit 10(4) of Form 10-Q of Registrant for the
three months ended June 30, 1981.
10(2) -Restated Second Extension and Amendment Agreement dated July 27,
1990 between Hess Oil Virgin Islands Corp. and the Government of
the Virgin Islands incorporated by reference to Exhibit 19 of Form
10-Q of Registrant for the three months ended September 30, 1990.
10(3) -Technical Clarifying Amendment dated as of November 17, 1993 to
Restated Second Extension and Amendment Agreement between the
Government of the Virgin Islands and Hess Oil Virgin Islands Corp.
incorporated by reference to Exhibit 10(3) of Form 10-K of
Registrant for the fiscal year ended December 31, 1993.
10(4)* -Incentive Compensation Award Plan for Key Employees of Amerada Hess
Corporation and its subsidiaries incorporated by reference to
Exhibit 10(2) of Form 10-K of Registrant for the fiscal year ended
December 31, 1980.
10(5)* -Financial Counseling Program description incorporated by reference
to Exhibit 10(3) of Form 10-K of Registrant for the fiscal year
ended December 31, 1980.
11
13
3. EXHIBITS (continued)
10(6)* -Executive Long-Term Incentive Compensation and Stock Ownership Plan
of Registrant dated June 3, 1981 incorporated by reference to
Exhibit 10(5) of Form 10-Q of Registrant for the three months
ended June 30, 1981.
10(7)* -Amendment dated as of December 5, 1990 to the Executive Long-Term
Incentive Compensation and Stock Ownership Plan of Registrant
incorporated by reference to Exhibit 10(9) of Form 10-K of
Registrant for the fiscal year ended December 31, 1990.
10(8)* -Amerada Hess Corporation Pension Restoration Plan dated January 19,
1990 incorporated by reference to Exhibit 10(9) of Form 10-K of
Registrant for the fiscal year ended December 31, 1989.
10(9)* -Letter Agreement dated August 8, 1990 between Registrant and Mr.
John Y. Schreyer relating to Mr. Schreyer's participation in the
Amerada Hess Corporation Pension Restoration Plan incorporated by
reference to Exhibit 10(11) of Form 10-K of Registrant for the
fiscal year ended December 31, 1991.
10(10)* -Letter Agreement dated November 2, 1994 between Registrant and Mr.
Michael W. Press relating to Mr. Press's participation in the
Amerada Hess Corporation Pension Restoration Plan and his
severance benefits incorporated by reference to Exhibit 10(10) of
Form 10-K of Registrant for the fiscal year ended December 31,
1994.
10(11)* -1995 Long-Term Incentive Plan, as amended, incorporated by
reference to Appendix A of Registrant's definitive proxy statement
for the annual meeting of stockholders to be held on May 1,
1996.**
13 -1995 Annual Report to Stockholders of Registrant.
21 -Subsidiaries of Registrant.
23 -Consent of Ernst & Young LLP, Independent Auditors, dated March 22,
1996, to the incorporation by reference in Registrant's
Registration Statements on Form S-8 (Nos. 33-39816 and 33-65115)
of its report relating to Registrant's financial statements, which
consent appears on page F-2 herein.
27 -Financial Data Schedule (for electronic filing only).
- --------------------------------------------------------------------------------
* These exhibits relate to executive compensation plans and arrangements.
** This plan was adopted by the Board of Directors of Registrant, subject to
stockholder approval of the plan at the next annual meeting of stockholders
scheduled to be held on May 1, 1996.
(b) REPORTS ON FORM 8-K
During the fourth quarter of 1995, the Registrant filed a report on Form
8-K, dated December 6, 1995. Such report covered Item 5 -- Other Events, and
dealt with the issuance of a press release reporting that the Registrant will
take a charge to earnings in connection with the adoption of Financial
Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of.
12
14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON THE 22ND DAY OF
MARCH 1996.
AMERADA HESS CORPORATION
(REGISTRANT)
By /s/ JOHN Y. SCHREYER
....................................
(JOHN Y. SCHREYER)
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------------------
Director, Chairman of
the Board and
Chief Executive Officer
/s/ JOHN B. HESS (Principal Executive Officer) March 22, 1996
......................................
(JOHN B. HESS)
Director, President and Chief
/s/ W.S.H. LAIDLAW Operating Officer March 22, 1996
......................................
(W.S.H. LAIDLAW)
Director March 22, 1996
......................................
(MARCO B. BIANCHI)
/s/ NICHOLAS F. BRADY Director March 22, 1996
.....................................
(NICHOLAS F. BRADY)
/s/ J. BARCLAY COLLINS II Director March 22, 1996
.....................................
(J. BARCLAY COLLINS II)
/s/ BERNARD T. DEVERIN Director March 22, 1996
.....................................
(BERNARD T. DEVERIN)
/s/ PETER S. HADLEY Director March 22, 1996
.....................................
(PETER S. HADLEY)
/s/ LEON HESS Director March 22, 1996
.....................................
(LEON HESS)
/s/ EDITH E. HOLIDAY Director March 22, 1996
.....................................
(EDITH E. HOLIDAY)
/s/ THOMAS H. KEAN Director March 22, 1996
.....................................
(THOMAS H. KEAN)
/s/ H. W. MCCOLLUM Director March 22, 1996
.....................................
(H. W. MCCOLLUM)
/s/ ROGER B. ORESMAN Director March 22, 1996
.....................................
(ROGER B. ORESMAN)
13
15
SIGNATURE TITLE DATE
- ----------------------------------------------------------------------------------------------
Director March 22, 1996
.........................................
(WILLIAM A. POGUE)
/s/ MICHAEL W. PRESS Director March 22, 1996
.........................................
(MICHAEL W. PRESS)
Director, Executive Vice
President
and Chief Financial Officer
(Principal Accounting and
/s/ JOHN Y. SCHREYER Financial Officer) March 22, 1996
.........................................
(JOHN Y. SCHREYER)
/s/ RICHARD B. SELLARS Director March 22, 1996
.........................................
(RICHARD B. SELLARS)
/s/ WILLIAM I. SPENCER Director March 22, 1996
.........................................
(WILLIAM I. SPENCER)
Director March 22, 1996
.........................................
(ROBERT F. WRIGHT)
- ----------------------------------------------------------------------------------------------
14
16
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PAGE
NUMBER
- ------------------------------------------------------------------------------------------
Consolidated Balance Sheet at December 31, 1995 and 1994......................... *
Statement of Consolidated Income for each of the three years in the period ended
December 31, 1995.............................................................. *
Statement of Consolidated Retained Earnings for each of the three years in the
period ended December 31, 1995................................................. *
Statement of Consolidated Cash Flows for each of the three years in the period
ended December 31, 1995........................................................ *
Statement of Consolidated Changes in Common Stock and Capital in Excess of Par
Value for each of the three years in the period ended December 31, 1995........ *
Notes to Consolidated Financial Statements....................................... *
Report of Ernst & Young LLP, Independent Auditors................................ *
Quarterly Financial Data......................................................... *
Supplementary Oil and Gas Data................................................... *
Consent of Independent Auditors.................................................. F-2
Schedules........................................................................ **
- --------------------------------------------------------------------------------
* The financial statements and notes thereto together with the Report of
Ernst & Young LLP, Independent Auditors, on pages 26 through 40, the Quarterly
Financial Data (unaudited) on page 25, and the Supplementary Oil and Gas Data
(unaudited) on pages 41 through 45 of the accompanying 1995 Annual Report to
Stockholders are incorporated herein by reference.
** All schedules have been omitted because of the absence of the conditions
under which they are required or because the required information is presented
in the financial statements or the notes thereto.
F-1
17
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Amerada Hess Corporation of our report dated February 15, 1996,
included in the 1995 Annual Report to Stockholders of Amerada Hess Corporation.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8, Nos. 33-39816 and 33-65115) pertaining to the Amerada Hess
Corporation Employees' Savings and Stock Bonus Plan and the 1995 Long-Term
Incentive Plan, of our report dated February 15, 1996, with respect to the
consolidated financial statements incorporated herein by reference.
/S/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
New York, N.Y.
March 22, 1996
F-2
18
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------------ ----------------------------------------------------------
3(1) -- Restated Certificate of Incorporation of Registrant
incorporated by reference to Exhibit 19 of Form 10-Q of
Registrant for the three months ended September 30, 1988.
3(2) -- By-Laws of Registrant incorporated by reference to Exhibit
3(2) of Form 10-K of Registrant for the fiscal year ended
December 31, 1985.
4(1) -- Note and Warrant Purchase Agreement, dated June 27, 1991
(including the form of the Common Stock Purchase Warrant
expiring June 27, 2001, included as Exhibit B thereof)
incorporated by reference to Exhibit 4 of Form 10-Q of
Registrant for the three months ended June 30, 1991.
4(2) -- Amendment, dated as of May 15, 1992 to the Note and
Warrant Purchase Agreement, dated June 27, 1991 (including
the form of the common stock purchase warrant expiring
June 27, 2001, included as Exhibit B thereof),
incorporated by reference to Exhibit 19 of Form 10-Q of
Registrant for the three months ended June 30, 1992.
-- Other instruments defining the rights of holders of
long-term debt of Registrant and its consolidated
subsidiaries are not being filed since the total amount of
securities authorized under each such instrument does not
exceed 10 percent of the total assets of Registrant and
its subsidiaries on a consolidated basis. Registrant
agrees to furnish to the Commission a copy of any
instruments defining the rights of holders of long-term
debt of Registrant and its subsidiaries upon request.
10(1) -- Extension and Amendment Agreement between the Government
of the Virgin Islands and Hess Oil Virgin Islands Corp.
incorporated by reference to Exhibit 10(4) of Form 10-Q of
Registrant for the three months ended June 30, 1981.
10(2) -- Restated Second Extension and Amendment Agreement dated
July 27, 1990 between Hess Oil Virgin Islands Corp. and
the Government of the Virgin Islands incorporated by
reference to Exhibit 19 of Form 10-Q of Registrant for the
three months ended September 30, 1990.
10(3) -- Technical Clarifying Amendment dated as of November 17,
1993 to Restated Second Extension and Amendment Agreement
between the Government of the Virgin Islands and Hess Oil
Virgin Islands Corp. incorporated by reference to Exhibit
10(3) of Form 10-K of Registrant for the fiscal year ended
December 31, 1993.
10(4)* -- Incentive Compensation Award Plan for Key Employees of
Amerada Hess Corporation and its subsidiaries incorporated
by reference to Exhibit 10(2) of Form 10-K of Registrant
for the fiscal year ended December 31, 1980.
10(5)* -- Financial Counseling Program description incorporated by
reference to Exhibit 10(3) of Form 10-K of Registrant for
the fiscal year ended December 31, 1980.
10(6)* -- Executive Long-Term Incentive Compensation and Stock
Ownership Plan of Registrant dated June 3, 1981
incorporated by reference to Exhibit 10(5) of Form 10-Q of
Registrant for the three months ended June 30, 1981.
10(7)* -- Amendment dated as of December 5, 1990 to the Executive
Long-Term Incentive Compensation and Stock Ownership Plan
of Registrant incorporated by reference to Exhibit 10(9)
of Form 10-K of Registrant for the fiscal year ended
December 31, 1990.
19
EXHIBIT
NUMBER DESCRIPTION
------------ ----------------------------------------------------------
10(8)* -- Amerada Hess Corporation Pension Restoration Plan dated
January 19, 1990 incorporated by reference to Exhibit
10(9) of Form 10-K of Registrant for the fiscal year ended
December 31, 1989.
10(9)* -- Letter Agreement dated August 8, 1990 between Registrant
and Mr. John Y. Schreyer relating to Mr. Schreyer's
participation in the Amerada Hess Corporation Pension
Restoration Plan incorporated by reference to Exhibit
10(11) of Form 10-K of Registrant for the fiscal year
ended December 31, 1991.
10(10)* -- Letter Agreement dated November 2, 1994 between Registrant
and Mr. Michael W. Press relating to Mr. Press's
participation in the Amerada Hess Corporation Pension
Restoration Plan and his severance benefits incorporated
by reference to Exhibit 10(10) of Form 10-K of Registrant
for the fiscal year ended December 31, 1994.
10(11)* -- 1995 Long-Term Incentive Plan, as amended, incorporated by
reference to Appendix A of Registrant's definitive proxy
statement for the annual meeting of stockholders to be
held on May 1, 1996.**
13 -- 1995 Annual Report to Stockholders of Registrant.
21 -- Subsidiaries of Registrant.
23 -- Consent of Ernst & Young LLP, Independent Auditors, dated
March 22, 1996, to the incorporation by reference in
Registrant's Registration Statements on Form S-8 (Nos.
33-39816 and 33-65115) of its report relating to
Registrant's financial statements, which consent appears
on page F-2 herein.
27 -- Financial Data Schedule (for electronic filing only).
- --------------------------------------------------------------------------------
* These exhibits relate to executive compensation plans and arrangements.
** This plan was adopted by the Board of Directors of Registrant, subject to
stockholder approval of the plan at the next annual meeting of stockholders
scheduled to be held on May 1, 1996.