We are active in three areas in the United States: deepwater Gulf of Mexico, the Williston Basin in North Dakota, and the Permian Basin in West Texas.

Hess Corporation is an active producer and explorer in the deepwater Gulf of Mexico. In addition to the Garden Banks area, we have a growing presence in the Green Canyon area, which was further enhanced by our recent acquisition in the Genghis Khan development (Hess 28%) and discovery at Pony (Hess 100%). Hess is a leader in deepwater production technologies and continues to look for innovative solutions and new ways to produce and operate in this challenging frontier.

Conger (Hess 37.5%) and Baldpate (Hess 50%) are key Hess operated assets in the area. Using a technologically innovative compliant tower, the Baldpate Field, on Garden Banks 259/260, was brought on stream in 1998. Other fields include the Hess operated Penn State and Northwestern (both Hess 50%) fields and the non-operated Enchilada (Hess 25%), Hack Wilson (Hess 33%) and Llano fields (Hess 50%) Total production from the deepwater Gulf of Mexico exceeded 33,000 barrels of oil equivalent per day in 2006.

Additionally, further appraisal drilling is advancing at the Tubular Bells discovery (Hess 20%) on Mississippi Canyon Block 725 and development drilling is progressing at the Shenzi project (Hess 28%) on Green Canyon Block 654.

For nearly three-quarters of a century, the continental United States has been an important production area for Hess. We remain committed to our position as a significant producer in the U.S. and continually look for cost-effective ways to increase our production presence there.

In North Dakota, we are the leading oil and natural gas producer. Following many years of maintaining production levels at several large company-operated units, including Beaver Lodge and Tioga Madison, our North Dakota asset is growing again with the development of our Bakken drilling program. Adjacent to the Williston Basin in western North Dakota, the Bakken Shale represents a new growth opportunity for Hess.

In the Permian Basin, we are an industry leader in using carbon dioxide injection technology to maximize oil recovery. We operate the Seminole San Andres Unit (Hess 34%) in western Texas. The Seminole carbon dioxide flood, which commenced in 1983, is one of the most successful tertiary recovery projects in the Permian Basin. An additional residual oil zone development at the Seminole-San Andres Unit is also expected to commence in 2007. The Corporation intends to use carbon dioxide gas from its interests in the West Bravo Dome in New Mexico for the enhanced recovery effort.