Amerada Hess Corp. announced it will be chopping capitalexpenditures by $900 million next year from the $1.45 billion spentthis year. It also plans to reduce its exploration and productionwork force by 400 positions, a 20% reduction in the U.S. and theU.K., resulting in $18 million in annual savings after taxes.

In addition, Hess plans to identify certain non-strategicpetroleum marketing assets for sale as part of its continuingeffort to improve returns on refining and marketing.

Exploration expenditures will decline by 40%, from over $400million in 1998 to $250 million in 1999. Exploration drilling isestimated at 30 wells in 1999 compared to 66 in 1998. In addition,the successful completion of several major oil and gas fielddevelopments will decrease the company’s development expendituresfrom $700 million in 1998 to $470 million in 1999. The new fieldcompletions are expected to increase Hess’ production 25% next yearto 85,000 barrels per day and another 20%, or by 75,000 bbl, in2000. The production increases and cost reduction initiatives willresult in a reduction in oil equivalent lifting costs and generaland administrative expense in 1999 by $1.25/bbl compared to 1997.

Amerada Hess will record a $150 million after-tax charge inDecember covering its exploration and production operations,bringing charges for the year to a total of $300 million.

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