October 22, 2012
Hess Corporation Business Analysis II
The Hess Corporation is a billion dollar energy business and a Fortune 500 company; however, some of Hess’s competitors have greater capital gain, more significant revenue and better expansion. Hess Corporation did very well by ranking 74 out of 500 of the United States companies on the Fortune 500 Magazine list and by ranking 445 in the FT Global 500 list; however, Exxon Mobil Corporation ranked #1 in Fortune 500 Magazine and #2 on the FT Global 500. British Petroleum, also known as BP, is another strong competitor of Hess Corporation and although not ranked on the Fortune 500 list, for obvious reasons, British Petroleum ranked #34 on the FT Global list.
All three of these companies are large publically traded integrated oil companies; however, Exxon Mobil leads the pack in many ways. Aside from the company’s top ratings, Exxon Mobil reported last year proved reserves of 24.9 billion barrels of oil equivalent, including its major holdings in oil sands through Imperial Oil, whereas British Petroleum reported 17.8 billion barrels of oil equivalent and Hess Corporation report only 2.4 billion barrels of oil equivalent. Exxon Mobil also supplies refined products to more than 25,000 gas stations in 100 countries, British Petroleum operates 21,800 gas stations worldwide, and Hess Corporation markets gasoline through more than 1,360 Hess gas stations in 16 states within the United States. However, one thing that does separate Hess Corporation from these two other competitors is that Hess Corporation also provides power to the Northeast and Mid-Atlantic region of the United States.
Regarding Hess Corporation’s business environment, I was able to locate an online career organization that provides some great insight regarding corporation reviews and ratings, which also include employee satisfaction and approval ratings for company CEOs. The company is called “Glassdoor” and they have nearly three million reviews from anonymous employees, job seekers, and sometimes even from companies themselves.
According to Glassdoor, 63% of employees would recommend working for Hess Corporation to a friend, and they give their CEO, John Hess, an 82% approval rating. Hess Corporation is viewed as a professional corporation that offers a “cross cultural” working environment, which exposes corporate ethics and a professional learning experience. They also value opinions from junior level employees just as much as they value the opinions of senior position employees. In comparison, Exxon Mobil and British Petroleum are viewed in the same light, despite the historic Valdez oil tanker and Gulf of Mexico deep-water rig incidents. Exxon Mobil has a 65% recommendation level and the company’s CEO, Rex W. Tillerson received an 89% approval rating and British Petroleum has a 71% recommendation level and the company’s CEO, Robert Dudley, received an 84% approval rating.
British Petroleum, aside from acquiring higher percentage levels of recommendations, also seems to outdo Hess Corporation and Exxon Mobil in ratings with respect to career opportunities, compensation and benefits, work/life balance, senior leadership, culture, and values. Employees give British Petroleum 3.5 stars, while Exxon Mobil and Hess Corporation trail with 3.4 and 3.3 stars respectively.
However, after reviewing all three of the company’s income statements, balance sheets, and cash flows, I learned that British Petroleum was financially healthier than the other two companies. In the sense that British Petroleum’s income statement revealed that the company’s EBITDA growth in 2011 was over 2,700%, while Exxon Mobile’s was 26.98% and Hess Corporation was only 7.23%. The balance sheet for Hess Corporation disclosed its’ total current assets at 8.34 billion, Exxon Mobil 72.96 billion and British Petroleum at 57.37 billion. Last, Hess Corporation’s cash flow statement states a