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In other words, 2Q17 marks the low point in oil and gas production, with momentum accelerating in 2H17 to kick start a multi-year period of growth. Chart 1: Hess production outlook: inflection point from 2Q17 600 500 400 300 200 100 1Q16A 2016 4Q17E 3Q18E 2Q19F 1Q20E 2020E 4Q21E 3Q22E m Guyana m Utica m= NMB Valhall m Stampede gJDA mEG m Other GoM mOther/base mBakken Source: BofA Merrill Lynch Global Research estimates Critically, Hess has multiple levers to pull that reverse production declines as cash becomes available from completion of NMB and Stampede. Planned spending to complete NMB and Stampede is ~$700mm in 2017; with completion we expect this to drop closer to $200mm in 2018 so that before any contribution from operating cash flow from these projects we expect Hess ‘apples to apples’ capex to move lower in 2018 driving an inflection in free cash flow. Exhibit 3: Free cash flow turns positive in 2018 Exhibit 4: with an accelerating decline in net debt 4,000 5,000 3.x 3.0x 2,000 4,000 2.5x 3,000 2.0x 1.0x (4,000) 1,000 0.5x 2015A 2016A =2017E = 2018E 2019E 2020E 2021E 2015A 2016A 2017E 2018E 2019E 2020E 2021E me CFO lt Capex o===Free Cash Flow mas Net Debt == Net Debt / DACF Source: BofA Merrill Lynch Global Research estimates Source: BofA Merrill Lynch Global Research estimates Our assumptions include a likely project sanction of the first phase ‘early production system’ at the Liza discovery in 2Q17. However, based on discovered oil to date that we believe now easily exceeds 2bn barrels, we believe Hess is on the cusp of a multi-year period of growth that is material for a company of its size. Critically, we believe most commentators have not yet included the cash flow contribution from Guyana in Hess’ estimates given visibility that barely looks past 2018. However, with first oil now likely 4 Hess Corp.| 11 April 2017 Bankof America “> Merrill Lynch HOUSE_OVERSIGHT_014876