Jay Wilson - Vice President, Investor Relations John B. Hess - Chairman and Chief Executive Officer J. P. Rielly - Senior Vice President and Chief Executive Officer G. P. Hill - Executive Vice President and President, Worldwide Exploration and Production

Robert Kessler - Simmons & Company International Erik Mielke - Merrill Lynch Doug Leggate - Howard, Weil, Labouisse, Friedrichs Inc. Arjun Murti - Goldman Sachs & Co Paul Sankey - Deutsche Bank North America Mark Gilman - Benchmark Company LLC Paul Cheng - Barclays Capital Mark Flannery - Credit Suisse First Boston Neil McMahon - Sanford C. Bernstein & Co Faisel Khan - Citigroup

Good day, ladies and gentlemen. And welcome to the Hess Corporation First Quarter 2009 Conference Call. My name is Louisa and I will be your operator for today. At this time all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions). I'd now like to turn the call over to Mr. Jay Wilson, Vice President, Investor Relations. Please proceed, sir.

Thank you, Louisa. And good morning, everyone. 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. With me today are John Hess, Chairman of the Board and Chief Executive Officer; Greg Hill, President Worldwide Exploration and Production; and John Rielly, Senior Vice President and Chief Financial Officer. I'll now turn the call over to John Hess. John B. Hess: Thank you, Jay. And welcome to our first quarter conference call. We'll make a few brief comments after which John Rielly will review our financial results. For the first quarter of 2009, the corporation posted a loss of $59 million. Price of crude oil declined to $46 per barrel in the first quarter of 2009 from $96 per barrel in the year ago quarter. Significantly, lower commodity prices negatively impacted our first quarter financial results. For the first quarter of 2009 exploration and production had a loss of $64 million. Crude oil and natural gas production averaged 390,000 barrels of oil equivalent per day, which was roughly even with the same period last year. Hurricane related shut-ins reduced our first quarter 2009 production by 11,000 barrels of oil equivalent per day. By the end of the first quarter most of these volumes had been restored and we ended the quarter with a production rate of about 400,000 barrels of oil equivalent per day. Our full year 2009 production forecast remains 380 to 390,000 barrels of oil equivalent per day. Regarding our field developments, JDA Phase II in the Gulf of Taiwan in which Hess has a 50% working interest commenced production late last year. Our net natural gas production from the JDA complex averaged 285 million cubic feet per day during the first quarter. In the deepwater Gulf of Mexico, production commenced in March at the Shenzi Field where Hess has a 28% working interest. The field is currently producing at a net rate of about 10,000 barrels of oil equivalent per day and is expected to reach a net rate of 20,000 barrels of oil equivalent per day by the end of the year. In Indonesia, oil and LPG production commenced during the first quarter from our Ujung Pangkah Field, in which Hess has a 75% working interest. The addition of liquids production is expected to increase net production from Pangkah to about 18,000 barrels of oil equivalent per day by year-end. With regard to exploration, the operator of the BM-S-22 license offshore Brazil, in which Hess has a 40% interest announced in the first quarter that our first well, Azulao was an oil discovery. The operator filed a notice of discovery and submitted a plan of evaluation with the government. On March 10th, drilling of a second exploration well on the license commenced. The well, known as Guarani is currently drilling ahead. In the Carnarvon basin offshore Western Australia, the operator of the WA-404-P license, in which Hess has a 50% interest reported a natural gas discovery that encountered a gross column of 360 feet. Drilling on our 100% owned WA-390-P license is scheduled to resume in the middle of the year and we expect to complete five to six additional wells before the end of 2009. Turning to marketing and refining, net income in the first quarter of 2009 was $102 million, which was above last year's first quarter. Primarily due to higher earnings from both energy marketing and trading, which more than offset weaker results in retail marketing and refining. Energy marketing benefited from colder weather in the first quarter of 2009 which experienced 10% more degree days than the same period last year. Fuel oil and electricity sales were both up by more than 20%, while natural gas sales grew by about 4% year-over-year. While retail marketing fuel margins declined as a result of wholesale prices increasing faster than pump prices, versus the year ago quarter. Average gasoline volume per station was up 2% and convenient store sales were up by about 7%. Refining results were negatively impacted by the weak global economy. Margins of the Hovensa refinery were lower particularly for this year versus last year's first quarter. In response to the weak economic environment, we have taken a number of actions to strengthen our balance sheet and maintain financial flexibility. In December, we announced a 2009 capital and exploratory budget of $3.2 billion which was 33% below 2008 expenditures, and sized to reflect the impact of lower commodity prices and protect our long-term growth options. During the quarter, we implemented company wide cost reductions. These initiatives included selective personnel reductions, as well as cost savings from many of our suppliers and service providers. Also in the first quarter, we issued $1 billion of ten-year and $250 million of five-year debt securities. Proceeds from the offering were used to reduce short-term borrowings and improve near-term liquidity. We will continue to take the steps required to preserve our financial strength and protect our growth options. Depending on future market conditions and commodity prices, we may consider accessing the financial markets for equity and/or debt. We are committed to maintaining the strength of our balance sheet, so that we are well positioned when the economy recovers to capitalize on our exciting future investment opportunities which will sustain the long-term growth of our reserves and production. I will now turn the call over to John Rielly. J. P. Rielly: Thanks, John. Hello everyone. In my remarks today, I will compare first quarter 2009 results to the fourth quarter of 2008. First quarter 2009 consolidated results amounted to a net loss of $59 million, compared with a net loss of $74 million in the fourth quarter. Starting with exploration and production. Exploration and production operations in the first quarter of 2009 had a loss of $64 million compared with the loss of $125 million in the fourth quarter. The first quarter included a $13 million after-tax charge for the impairment of two short life fields, located offshore U.K., while the fourth quarter of 2008 included charges totaling $26 million after-tax for asset impairments and hurricane costs. Excluding the items affecting comparability in earnings, the after-tax components of the improvement in results are as follows: lower selling prices, including the effect of hedging decreased earnings by $149 million, lower expenses increased earnings by $125 million. Lower foreign currency losses increased earnings by $78 million. All other items net to a decrease in earnings of $6 million, for an overall increase in first quarter adjusted earnings of $48 million. As indicated in the earnings release first quarter production was 390,000 barrels per day of oil equivalent production. In the first quarter of 2009 our E&P operations were under lifted compared with production, resulting in decreased after-tax income in the quarter of approximately $10 million. In the first quarter of 2009, the unusually high E&P effective tax rate primarily reflects the impact of Libyan taxes in a lower commodity price environment together with the mix of income and losses from countries with varying tax rates. Turning to marketing and refining, the results of marketing and refining operations amounted to income of $102 million in the first quarter of 2009 compared with $152 million in the fourth quarter. Results of refining operations amounted to a loss of $18 million in the first quarter compared with income of $27 million in the fourth quarter. The corporation share of a vendor's results after income taxes amounted to a loss of $25 million in the first quarter compared with income of $13 million in the fourth quarter, primarily reflecting lower refining margins. In February 2009, the corporation received the final payment on its note receivable from PDVSA. Oil heating earnings were $7 million in the first quarter compared with $14 million in the fourth quarter. Marketing earnings amounted to $101 million in the first quarter of 2009 compared with $138 million in the fourth quarter, principally reflecting lower margins. Trading activities generated income of $19 million in the first quarter compared with the loss of $13 million in the fourth quarter. Turning to corporate, net corporate expenses amounted to $49 million in the first quarter of 2009 compared with $59 million in the fourth quarter. Net corporate expenses in the first quarter of 2009 including after-tax charge of $16 million for retirement benefits and employee severance costs. As a result of the cost reduction initiatives as well as lower commodity prices, exploration and production cash operating costs are expected to be reduced by $1 to a range of 14 to $15 per BOE. Total unit costs are now anticipated to be in the range of $27 to $29 per BOE for 2009. In addition net corporate expenses are expected to be reduced by $10 million to a range of 155 million to $165 million, excluding special items. In February 2009, the corporation issued 1.25 billion of senior unsecured notes. The majority of the proceeds were used to repay revolving credit debt and outstanding borrowings on other credit facilities. After-tax interest expense was $48 million in the first quarter, compared with $42 million in the fourth quarter. Turning to cash flow; net cash provided by operating activities in the first quarter, including an increase of $80 million from changes in working capital was $625 million. Net proceeds from our debt offering were $1,246 billion. Repayment of borrowings amounted to $873 million in the quarter. Capital expenditures in the quarter were $704 million. All other items amounted to a decrease in cash flow of $45 million. Resulting in a net increase in cash and cash equivalents in the first quarter of $249 million. We had 1,157 billion of cash and cash equivalents at March 31, 2009 and 908 million at December 31, 2008. Our available revolving credit capacity was 2,406 billion at March 31, 2009. Total debt was 4,328 billion at March 31, 2009, and 3,955 billion at December 31, 2008. Net debt increased by $124 million to 3,171 billion at March 31, 2009. The corporation's debt to capitalization ratio at March 31, 2009 was 26.3%, compared with 24.2% at the end of 2008. This concludes my remarks. We will be happy to answer any questions. I will now turn the call over to the operator.

(Operator Instructions). And your first question comes from the line of Robert Kessler with Simmons & Company. Please proceed. Robert Kessler - Simmons & Company International: Good morning, gentleman. I wanted to see if you could provide some more color on BM-S-22, particularly the second well, where you are in terms of the current drilling depth relative to the target depth? And then if in fact you are targeting a second structure with that well, rather than further deionization of the first structure?

Yeah, thanks for the question. Let me just first, after a few contextual comments about Brazil, just put it on perspective. I think, I always want to remind people, the size of the blocks that we are trying to evaluate down there is half the size of Rhode Island. And we do have one well that we saw hydrocarbons which is a positive sign, because that's better than no hydrocarbons in the well. We are on our second well, we are about 80% of the way to TD and we are currently in salt. So I think the punch line is, it's still very, very early days for Brazil. Robert Kessler - Simmons & Company International: Great. Thanks for that. And then a quick follow-up, with regard to the plan of the evaluation. When you expect approval to be received from the ANT for that plan of evaluation. And based on that, would you expect to move straight to a third well after the second one completes?

Can't really comment too much on that, the operator is currently working with the Brazilin authorities now to on the evaluation plan as we speak. Robert Kessler - Simmons & Company International: Okay. Thank you.

Your next question comes from the line of Erik Mielke with Merrill Lynch. Please proceed. Erik Mielke - Merrill Lynch: Yeah, good morning. John, I was a little bit puzzled by something you mentioned in your prepared remarks. You may have used this phrase before, I certainly haven't come across it in your quarterly conference calls. You talked about accessing equity markets. Given your bond issue at the beginning of this quarter I thought your cash position and balance sheet was, relatively robust which means you wouldn't need to access further capital. Should I think of this more in terms of new development opportunities, rather than just putting bank quotations, issuance rather than lower wells environment necessitating further finance?

Fair question. I think the context is important here. Obviously, we have wonderful growth investment opportunities ahead of us. We want to make sure in these times of financial turmoil that we keep a strong balance sheet, so as the economy recovers we can capitalize on those meaningful investment opportunities. So we have several options that we have available to us, certainly keeping CapEx and OpEx under control and reducing wherever appropriate to keep our financial strength is first and foremost in our mind in the things that we've done. But we also have other options and one of them is to access financial markets as the future unfolds. Though it's just a question of letting people know that we are very vigilant about keeping a strong balance sheet, the investment grade rating is something we will protect so that we keep our financial strength, so that the economy recovers and there is little more visibility and hopefully strength in oil price, we'll be in a strong position to pursue investment options that will be ahead of us. Erik Mielke - Merrill Lynch: Okay. So if I'm -- just to make sure I understand this correctly, so the circumstance is that would lead you to considering extensions will either be driven by the opportunities that which could be organic or inorganic '08 and need to maintain your current credit rating?

Yeah, it's a question of keeping the appropriate balance in the short-term to stay financially strong, but in the long-term to keep our growth trajectory intact. Erik Mielke - Merrill Lynch: Very good, thanks. If I may just a second follow-up question on for John Rielly on operating cost, can you give a little bit more color on where -- what you're seeing in the E&P segment on operating cost and your expectations going forward? I know you've given some guidance today but more trying to get a little bit more color on that? J. P. Rielly: Sure. I mean again the guidance I gave you is what I think going forward you should use for modeling purposes. But let me just give you even more context on what we are doing in our cost cutting initiatives and then I can talk about the industry in general. So we've initiated a global cost cutting program which we right now expect to reduce cost by approximately 200 million in 2009, of which about a 120 million is expected to be ongoing post 2009. The savings that we are achieving right now they include operating efficiencies which is primarily driven by renegotiation of our supplier contracts and optimization initiatives. But as you saw from the charge we took in the quarter we do have reductions in force and we are deferring projects. I guess the important thing that I want to let you know about our cost saving program is it's not one-time, we have our global organization focused on this. So we have an ongoing effort and we hope to achieve additional cost savings as the year progresses. As we are talking about the industry in general again as we're seeing from our supplier contracts and our renegotiations costs are coming down. Now again it all depends on lead time and where we are in our projects, some of them we've got contracts in place that will take some time before the lower cost. But you probably heard the numbers when you hear let's say pipe and steel down about 20% or so in the industry, the onshore land rigs are down considerably again you have to work through where we have contracts or not. But you're seeing in the industry down about 50% as it relates to those onshore land rigs. The deepwater offshore, the latest -- the deep shore rigs they are staying pretty tight right now. The utilization is still high, but you don't see tremendous cost decreases in that area. But again we have a lot of pending negotiations going on as I said it's an ongoing effort for us, so we look to hopefully increase these cost savings as the year progress. Erik Mielke - Merrill Lynch: That's great. Thanks very much.

Your next question comes from the line of Doug Leggate with Howard Weil. Please proceed. Doug Leggate - Howard, Weil, Labouisse, Friedrichs Inc.: Thank you. Good morning, everybody. A couple of questions, when you look back at your strategy over the years when you refine to, I guess rebuild the reserve debt you had I guess of course you are taking very large positions in material assets and I guess that's continued in the last couple of years. But in light of your comments John has about potentially topping the equity markets, I imagine that -- that is related to the possibility that some of the things you have are really too large for you to finance from your current cash flow. So I'm wondering if you could put into context therefore, is that indeed what you are kind of a alluding to and if so why would you not consider selling down some of the very large positions that you have currently and how before what?

Well, first Doug, thanks for the question, it's a good question. First, we have to get these wonderful growth options more defined, whether it's God willing Brazil or Australia, Libya, the Pony prospect is obviously something we are continuing to work on to refine the cost estimates on. So we have these growth options, they need more definition. But in the environment we are in, we want to make sure we keep our balance sheet strong and our liquidity strong. We significantly reduced our capital spend to do that, we have ongoing cost reduction efforts that John Rielly just talked about to do that. We did the debt offering in the first quarter to do that. And then depending on future market conditions and commodity prices, we will consider various options one maybe diluting down on some of these investment options once they are more defined, one maybe upgrading our portfolio of assets with the normal course of some selected asset sales. And another would be considering to use the financial markets if and when it makes sense to do that. So what we are signaling here, is that we have great growth options, they need further definition, we are in an uncertain times and in all this we just think it's prudent to keep all our options on the table so that we keep our balance sheet strong, so that when the oil price improves, as well as financial markets improve, we will be in a position to capitalize on the growth opportunities we have. Doug Leggate - Howard, Weil, Labouisse, Friedrichs Inc.: Great. Thank you for answering that one. Going through the next one to Greg, is my final question. As I look at your project portfolio this year, Shenzi come on a little early, Pangkah looks like came on a little ahead of schedule also, and you're not still embarking in the Gulf of Mexico. So I'm looking at you production guidance for the year, and wondering where the offset comes, because it looks that 380 to 390 could be a little conservative, given the success you've had so far. I am just wondering if you could put into context of underlying decline rates, the impact of maybe slowing down the capital program in the Bakken Shale for example. And just so we put into context where the risk lies, about 380 to 390 the guidance you have given us? G. P. Hill: Yeah, thank you. Of course we'll update our guidance mid-year. But as you recall in that, in the third quarter that's a heavy maintenance season in the North Sea so you have to really dial that into your estimates. I mean, so we feel pretty good about the 380 to 390 range still being in an acceptable range. So it's all related to how much maintenance is being done in the North Sea, in the third quarter. Doug Leggate - Howard, Weil, Labouisse, Friedrichs Inc.: Okay. Thanks.

Your next question comes from the line of Arjun Murti with Goldman Sachs. Please proceed. Arjun Murti - Goldman Sachs & Co: Thank you. I was wondering if you could provide any comments on your follow-up plans in Ghana. I think last time you had mentioned, you were shooting seismic on the western portion of the block, as well as the follow-up plans for Libya. And then I think, Pony, it sounded like you are working on the development cost there, could you just provide an update on Pony as well? Thank you. G. P. Hill: Yeah, thanks for the question. Let me start with Ghana first. So yes, we've recently acquired some seismic over the western block, we are in the process of processing that seismic, so we don't have anything definitively to say, yet. So it's early to talk about follow-up wells, when and where. Libya, as we've said before, I think we are excited about the results of the discovery well, it's a large structure that's a direct extension of the base in onshore. We are going to shoot additional seismic in Libya, this year and we are likely to drill an appraisal well in Libya in the latter half of the year. If I turn to Pony, we are in the midst to seed right now for an own development of Pony. We're also in discussions with the Knotty Head Partners about a potential unitization of our block and their block, which we think would give economies of scale to both parties. So that's kind of where we are on all three of those areas. Arjun Murti - Goldman Sachs & Co: In terms of the pony, I think the Knotty Head Partners are finally going to get their rig in the second half of this year to drill delineation, are you discussions with them, contingent upon them drilling those wells or could you have unitization and such things before that? G. P. Hill: Well, our discussions are ongoing as either for unitization now or unitization later. So we are just in advance discussions on unitization. Arjun Murti - Goldman Sachs & Co: That is terrific. Thank you very much.

Your next question comes from the line of Paul Sankey with Deutsche Bank. Please proceed. Paul Sankey - Deutsche Bank North America: Hi, everyone, good morning. If I could just continue reaching around a little bit in your priorities here, with the reference to volumes. Firstly, on a long-term basis, is the 3 to 5% aspiration something that we should consider as, if you like a bedrock aim that you have as a company or would that be part of the balance and maybe we wouldn't expect quite so much growth from you in the future. I'm very specifically thinking about the importance of U.S. growth that you have got in the relatively near-term against the profitability, the current profitability of the U.S. business? Thanks. G. P. Hill: Okay. So let me provide a little context first. So I think the portfolio definitely has the capacity to grow in excess of 3% per year. But as John said the current prices it's prudent to reduce capital expenditures and therefore moderate disclose. So yes we are going to see lower production growth numbers in the short-term. Of course as prices increase we'll then increase our growth rate accordingly. So just to reiterate our current strategy, we are moderating our program to stay financially strong in the short-term while preserving our long-term option. Paul Sankey - Deutsche Bank North America: Right, I've got you. And just in terms of how that effects the U.S. business, could you just talk a bit more about your activity perhaps I understand what you're saying about this year, but perhaps for next year as well given that the expected growth that you previously had in that business? G. P. Hill: Yeah. So I think -- I mean if I look at the U.S. business the one program that we have moderated is the Bakken. So we plan to drill about 33 wells this year it will be a three rig continuous program through the year and of course as the cost come down, continue to come down, we will obviously end prices go up we'll moderate that program accordingly. I think as John O'Conner said in the fourth quarter, I think the belief has been get for us on the Bakken we've been working with our suppliers and contractors that bring the drilling and completion cost down further. For our strategy there is to preserve the acreages that we have continue to work on cost and then be ready to ramp up as prices improve. Paul Sankey - Deutsche Bank North America: Great thanks. And you've being quite specific about how to think about this year. But I just wanted for this particular quarter I was a bit surprised by the weakness in European gas, I wanted to -- given the weather in what we saw in Europe what I am missing there? G. P. Hill: Yeah so the biggest story in Europe on gas is Atlantic Cromarty. We're approaching end to field wise at Atlantic Cromarty, and so we lost fair amount of production in those two fields. For those of you that have been on the end of gas fields trying to predict the end of field life is an art much more than the science. And so we are moderating those wells accordingly. Paul Sankey - Deutsche Bank North America: Okay, great. And finally from me there is a positive effect that we are doing here which is that do you have lower costs, could you provide more granularity on geographically where the best gains are in terms of costs, I mean I am thinking obviously regionally and then also by theme is there any particular areas that you can just highlight give us a better feel for how things are shifting as we go through this $50 environment? And I leave with that, thanks. J. P. Rielly: Sure, I will just give you a little bit more update, just to adding on what Greg was saying before there, obviously we've had a significant amount of work in, working with our suppliers in the U.S. so on the onshore, basically the Permian Basin but the Bakken in particular. So from a geographic standpoint the U.S. with now land rigs we did have contracted, so we have those costs in there, but for the drilling and completion work there, there is a lot of work we are doing with our suppliers, chemicals and steel pipe tubulars things like that. There are all those costs are coming down and we are working those hard. So we're seeing reductions in the U.S. As I told you the offshore rigs, I mean we've got those contracts, that we are not seeing much there then it just becomes amount of, as it relates to our steel and our pipe work throughout the company. So a lot of area with our drilling and completions and that goes across the portfolio, because we do have an active program as we know Pangkah is ramping up, EG was still doing a lot of drilling out there. So we are seeing cost coming down across the company as well there. And then obviously you have the general with commodity prices being lower we are obviously seeing reductions in our fuel cost with vessels, production taxes, and even FX we're seeing a little bit of the benefit there. Paul Sankey - Deutsche Bank North America: Was there anything to say on staffing levels or labor costs? J. P. Rielly: Yes, so, as related you saw we had a charge, the charge we took in the first quarter was related to reductions in force. So again that is part of those overall cost savings and the changes in our guidance that I gave to you. Paul Sankey - Deutsche Bank North America: Okay, I appreciate it. John, thank you. J. P. Rielly: Sure.

Your next question comes from the line of Mark Gilman, with The Benchmark Company. Please proceed. Mark Gilman - Benchmark Company LLC: Good morning, guys. A couple of questions, first one deals with Shenzi. Could you give us some kind of read Greg maybe on I know it's early but well performance, and I ask I guess principally because 20,000 a day year-end rate as John has suggested was perhaps a bit below what I might have expected? G. P. Hill: Yeah let me give you just a little more color on Shenzi. So as you know Shenzi came on production a little bit ahead of schedule, we are now at 10,000 barrels a day at Shenzi, the wells are doing a little bit better than expected. And that's where six wells on production, we expect to get four more drilled before year-end. I think the 20,000 barrel of day number is still good, because there is some uncertainty about water are for influx on Shenzi. So you can't be certain until you get some production under your belt there. Mark Gilman - Benchmark Company LLC: Is there any issue in terms of the impact of having produced Genghis Khan up to this point fairly aggressively? G. P. Hill: No, we are seeing no impact as a result of that. Mark Gilman - Benchmark Company LLC: Okay. So I shift in North Western Shelf, Greg, and maybe give us a little bit of an idea where you stand to date on your 100% block in terms of a critical mass for development? G. P. Hill: You bet. So again let me provide some overall perspective on Australia. As you know on our block, we have a 16 well commitment, where 25% of the way through our drilling program. So we've got four of 16 wells under our belt, three of which were discoveries. So that's very good news. But we still have a long way to go to understand exactly what we have. We plan to drill another five to six wells beginning in the middle of the year. I should say though, that we are beginning preliminary discussions with Woodside and Shell on potential options for liquefaction. So again I think we really won't know exactly what we have until some time in 2010 or trying to get ahead of things and starting new discussions on liquefaction. On Block 404, the block we shared with Woodside, they've drilled the first of nine wells, which was also a discovery, with some 360 feet of gross gas and the strophic. So again, here it's good news, but still very early days on Australia. Mark Gilman - Benchmark Company LLC: Okay. And one more for me if I could, shifting to the downstream side. The FCC utilization rates, John has, I guess it's not surprising to see a number in the 70s and necessarily in the first quarter. But, as you look back over the various periods in 2008 it was also 70% kind of utilization rates. Is there something going on here and is that operating rate at the FCC at Hovensa higher now, given the shift in road of product economics?

Yeah, it's just Mark, and I understand the reason you are asking the question. The combination of planned and unplanned maintenance, not only in the recent quarter, but in the last year, as well as the economic signals we get. Obviously, with the weak gasoline spreads, it did not make sense to run that at high rates and high severity and we cut back on it. So I'm just dealing with the economic markets that we are dealing with. And that's sort of an ongoing thing I would say that, the rates are higher now and running better in part because of some of that maintenance portion that was done, as well side through the economic, but the economics of the refining business as you know are still very poor. Mark Gilman - Benchmark Company LLC: Okay, John. Thanks.

Your next question comes from the line of Paul Cheng with Barclays Capital. Please proceed. Paul Cheng - Barclays Capital: Hi, guys. John, or Greg, when you are talking about the BM-S-22 the second well, did you indicate that you'll start a appraisal well to the first discovery or just really looking at a different view or structure? G. P. Hill: Could you repeat your question again so you're talking about the second well? Paul Cheng - Barclays Capital: Right. The second well that you are drilling. Is that a piece or to the same well structure of the first discovery or that this is targeting a different structure in the same Gulf? G. P. Hill: Yeah. So we're preparing along a different type of structure there is really four kind of structures that we would like to test on that block. Paul Cheng - Barclays Capital: So this is a different structure that you are testing? G. P. Hill: It's all four different kind of phases but it's all pre-sold. Paul Cheng - Barclays Capital: Right that means the different structure is not extended to the same field that you are testing? G. P. Hill: Yeah I mean--

And keep in mind all the size of this block. Paul Cheng - Barclays Capital: Absolutely fully understand.

Rhode Island. Paul Cheng - Barclays Capital: That's why I was asking Greg whether this is the same field or this is a different structure. And Greg, I know that is early day, can you tell us that what's the process, one that let's say you've finished the second well and did the discovery. Do you have from a regulatory standpoint limitation and when that you've need to submit in terms of the development plan or that a further appraisal plan? G. P. Hill: That's all part of the ongoing discussions between the operator and the government right now, as to what's the evaluation plans going to be in Brazil. So I really can't talk about that, that's what the operators in discussions now. Paul Cheng - Barclays Capital: Okay. I presume that maybe this is for John Rielly. The 2009 CapEx the 3.2 billion that, I presume there's no change at this point? J. P. Rielly: Right, there is no change in our guidance right now in this year and then again as we get to the second quarter conference call, we'll update our guidance for the year. Paul Cheng - Barclays Capital: John, how of the 101 million in the marketing profit for this quarter. How much is related to the home hitting operation? J. P. Rielly: Paul, we don't get that kind of granularity when we give out that kind of information. Paul Cheng - Barclays Capital: I don't need an exact number but is it 30%, 40% or--? J. P. Rielly: Generally energy marketing had a good quarter again with the way the weather and you can see the volumes that were there. So I can tell you it was a good quarter from that standpoint, but that's as far as the detail we give on that. Paul Cheng - Barclays Capital: And how about the 200 million--

Paul, the point here is natural gas sales and energy marketing did well, fuel oil sales did well. Electricity sales did well and heating oil sales did well simply because we had a normal winter and degree days were 10% ahead of last year. So it's really more across the board than just singling out one product to another. Paul Cheng - Barclays Capital: Sure. John, since I tell you here in terms of M&A opportunity, I mean some of your peer group maybe a short in cash, do you see opportunity to pick up some interesting offset or that you already feel your pay is too slow and you really want to focus on your existing portfolio?

Obviously, we don't comment on specifics of M&A and you know that. How do we think about the business, we worked hard to develop an organic platform to sustain the growth in our reserves and production. We are focused at two things keeping a strong balance sheet in the short-term, so that these exiting exploration and development opportunities that we had ahead of us we can execute and pursue when the timing is right. Obviously, there are things out there in the marketplace that we look at from time-to-time and if they enhance the portfolio strategically or financially, we compare them to the things that we already have in our own portfolio and quite frankly the majority of the time, the opportunities that we have in-house is a better investment for our shareholders because the organic focus that we have. Paul Cheng - Barclays Capital: So it sounds like that you would the priority would be focusing on your organic existing point?

That's correct. Paul Cheng - Barclays Capital: And, John can you give us an idea that what is the EG production, at Equatorial Guinea, on Permian how they are doing are they still holding up pretty close to the peak or that it was not a seemed that the more rapid decline there?

No, the Equatorial Guinea is holding firm at about currently it's at about 75,000 barrels a day net. Paul Cheng - Barclays Capital: Okay. And you haven't seen any side that is thought to be more rapid decline yet?

Not yet. Paul Cheng - Barclays Capital: Greg, can you give us an update of West Med in Egypt, how is that appraisal process, you guys haven't really talked much any update there? G. P. Hill: No, I think same status as we reported. There will be additional seismic processing and we are in the midst of understanding what our next steps are. Paul Cheng - Barclays Capital: So any timeframe say in six months that you have more of the data that you can share or is going to take a year in decline your timeframe you can share?

No, we haven't set a timeframe yet, at this point we are saying that we are going to need further drilling to replace the block, but in terms of timing can't really give any definitive guidance. Paul Cheng - Barclays Capital: Very good, thank you.

Your next question comes from the line of Mark Flannery with Credit Suisse. Please proceed. Mark Flannery - Credit Suisse First Boston: Thank you. My question is on the CapEx program, which is now down to $3.2 billion, this is in context of what you are mentioning earlier about potentially assets in the debt and the equity market. But if you look at that $3.2 billion, how much more easy deferral would you say is in there, and if you don't need to give a precise number, but I am wondering where we are in the CapEx program reduction cycle, if you will. J. P. Rielly: Mark, we are continuing to look at actually all our spend, be it CapEx or operating. But at this point, again as the year goes on you have ins and outs that are coming through. And again, we're still working on and trying to get efficiencies from our suppliers. What I would tell you right now is the $3.2 billion is our guidance, we are staying with this at this point, we will continue to monitor it and then on the second quarter conference call, we will give you updated guidance then. Mark Flannery - Credit Suisse First Boston: Okay. Let me ask just slightly different question, which is, you said you were expecting continued cost reduction through the year. Maybe I missed the number here. But do you have a target in dollars million, the way you think you will be by year-end? J. P. Rielly: No, we didn't give a target for where we would be by year-end. So as I said in my opening remarks, we are giving guidance now that are, cost will be down $1 per barrel on the cash operating side. And then from an after-tax standpoint on a corporate expenses down 10 million. And so we'll again continue as this year goes on, if the guidance changes, we get additional savings all add to that guidance as we go throughout the year. Mark Flannery - Credit Suisse First Boston: Great. Okay. Thank you very much. J. P. Rielly: Thank you.

The next question comes from the line of Neil McMahon with Sanford Bernstein. Please proceed. Neil McMahon - Sanford C. Bernstein & Co: Hi, I've got a number of questions, maybe going back to Ghana again. Based on the latest wells, just a bit in all sort of view, things vary much, we are certain that we are dealing with stratographic traps in the Ghana area. I just wanted to do give a sense of what you were seeing in the deeper water blocks to the side, and what's your first well more aimed at a structural trap than a stratographic trap? And secondly, just on Ghana itself how much interest do you have in potentially getting purchasing the Cosmos interest to get more information on that general area, and I've got a follow-up on Brazil too. G. P. Hill: Okay. On Ghana again, I think year-over-year we're still processing the seismic, we shoot additional seismic, trying to figure out what we have there to the west. And so, it's early days to be talking about what we think there, so we are in the midst of all that now, got the seismic back and we're in the process of -- processing it all currently. So very early days. As far as the Cosmos block no, we don't have any interest in that. Neil McMahon - Sanford C. Bernstein & Co: Maybe just so on that previous survey did you use different parameters shooting the survey from the last one? G. P. Hill: Can't answer that Neil. Have to get back with you on that. Neil McMahon - Sanford C. Bernstein & Co: Okay. Maybe just turning to Brazil, I am finding a bit strange maybe I am reading far too much into this, that your comment on BM-S-22, it's only a bit more like the oil industry term a technical success lower than something to be jumping up and doing on. I am just wondering on that particular block since this sitting on top of the very hard structural high and it's relatively shallow to other sub salt discoveries, are you seeing some reservoir issues or tighter reservoirs than you may have seen in other locations, or heard about in other locations in the basin? G. P. Hill: No I think, I think Neil I'm at again it's just too early days on Brazil to really make any definitive comments about what we have or we don't have. Again on the second well, we are 80% of the way to TD. We are in the midst to solve right now. I think what we can say about the second well on it's position is we believe it's in a better rock quality position than the first well, but that's about it. Neil McMahon - Sanford C. Bernstein & Co: And you can't decide is pretty interesting that's all. I was just wondering as well, the other wells in the basin targets three reservoir units whereas on BM-S-22 it's pretty obvious that Gulf of Sidra reservoir is in existence. The lower to sort of Sag reservoir units don't appear to be that obvious. Is that what the blocks move were they additional wells are aimed at lower reservoir structures rather than that of Sag reservoir? G. P. Hill: Neil I say again, it's just early days. I don't want to get into all the technical details about Brazil and what we are trying to do because obviously it's quite a sensitive area competitively. So I don't want to talk about what we are trying to target. Neil McMahon - Sanford C. Bernstein & Co: Okay. G. P. Hill: Thanks.

(Operator Instructions). And your next question comes from the line of Faisel Khan with Citigroup. Please proceed. Faisel Khan - Citigroup: Hi, good morning. Just curious on your operating cash flow and your per CapEx per quarter do you think that your cost cutting initiatives should be able to bring operating cash flow in line with the current run-rate in CapEx? J. P. Rielly: I hate to continue to use a early days here in the year. But I'm going to use that I mean again it is early days I don't want to speculate on what commodity prices will be -- assuming commodity prices are kind of flat. With commodity prices kind of flat, if you are going to say that cash flow is around that number there, and I gave you the target for cash operating cost, you can see that cash operating cost number if you have a dollar reduction in our production guidance, that's a $140 million there. So, you can see what that number is and you can run it through and compare to our CapEx number. So again, we run all sorts of scenarios on what commodity prices will be and what our cost savings can target. And we'll continue to update you throughout the year on where we see our guidance will be. Neil McMahon - Sanford C. Bernstein & Co: Okay. And in your prepared remarks when you talked about raising -- access in the debt market to the equity markets. I was wondering did you -- with any conversations that you have the rating agencies that kind of stemmed you to talk about those potential capital raisings? J. P. Rielly: No, actually. Again, as John had said earlier, it's just, as we look out and depending on future conditions, we will consider all options with the point being that we want to maintain our liquidity position and maintain a good strong balance sheet through these uncertain times. And so that's why we are considering various options, and it did not have anything to do with discussions with the rating agencies. Neil McMahon - Sanford C. Bernstein & Co: Okay. And just a question on your discovery in Libya in the fourth quarter, was that -- you talked about being a hydrocarbon discovery, but can you give us little more color, is it oil or gas, is it both or is it too early to say? G. P. Hill: It's to early to say. Neil McMahon - Sanford C. Bernstein & Co: Okay. Got you. Thanks for the time.

Your next question comes from the line of Mark Gilman with The Benchmark Company. Please proceed. Mark Gilman - Benchmark Company LLC: Yeah, thanks. John Rielly, this is off the wall one, so forgive me for it. But, I think I noticed for the first time somewhat unusual line in the income statement, and entitled net income awards attributable to non-controlling interest, right before the bottom-line net income attributable to Hess Corporation. Could you explain to me what this is about? J. P. Rielly: Sure. And you should be seeing that on a majority of companies coming out this quarter. If you look, I don't know you saw in the income statement, we have an asterisk at the bottom and it reflects the adoption of FASB 160 accounting for non-controlling interest. So there is a new accounting standard that came out that changes the classification of the way we disclose non-controlling interest, on our balance sheet as well as the income statement. That's why you see that new line there. So where we have non-controlling interest they just show up, I guess giving more transparency to the number. Mark Gilman - Benchmark Company LLC: So John, what's the difference between that and overall equity earnings, any? J. P. Rielly: No, its all before, that number if you want to pick this quarter that 42 just would have been up in our income statement in various lines and it's the minority interest in some our ventures. So that's all it is and it would have been in various line items in prior quarters. So really no change to the bottom-line at all, it's just the way you disclose the minority interest. Mark Gilman - Benchmark Company LLC: Okay. Thanks. J. P. Rielly: Sure.

With no further questions in the queue. I would like to thank you for your participation in today's conference. This concludes your presentation. You may now disconnect. And have a great day.