Hess Corporation (HES) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 28, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2022 Hess Corporation Conference Call. My name is Liz, and I will be your operator for today. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to Jay Wilson, Vice President of Investor Relations. Please proceed.

Jay Wilson - VP, IR

Thank you, Liz. Good morning, everyone, and thank you for participating in our first quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hess.com.

Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the Risk Factors section of Hess' annual and quarterly reports filed with the SEC.

Also on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website.

On the line with me today are John Hess, Chief Executive Officer; Greg Hill, Chief Operating Officer; and John Rielly, Chief Financial Officer. In case there are audio issues, we will be posting transcripts of each speaker's prepared remarks on www.hess.com following the presentations.

I'll now turn the call over to John Hess.

John Hess - CEO

Thank you, Jay. Welcome, everyone, to our first quarter conference call. Today, I will review our continuing progress to execute our strategy. Greg Hill will then discuss our operations, and John Rielly will cover our financial results.

With Russia's invasion of Ukraine, the spotlight has been put on energy security and the critical importance of oil and gas to the global economy. Energy security is essential for an orderly energy transition. Oil markets were tight even before the Russia-Ukraine conflict. We have now had 7 consecutive quarters of global oil inventory draws, and at the end of March, global oil inventories were estimated to be more than 400 million barrels less than pre-COVID levels.

The world is facing a structural oil supply deficit, and the only way to address it is through more industry investment and that will take time to have an impact. According to the International Energy Agency, a reasonable estimate for global oil and gas investment is at least $450 billion each year over the next 10 years to meet demand. In 2020, that number was $300 billion and last year's investment was $340 billion. So to ensure an affordable, just and secure energy transition, we need to invest significantly more in oil and gas. And we also must have government policies that encourage investment rather than discourage it.