AMERADA HESS CORP, DEF 14A, 1999-03-29

AMERADA HESS CORP
DEF 14A, 1999-03-29
PETROLEUM REFINING

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<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

Amerada Hess Corporation
................................................................................

(Name of Registrant as Specified in Its Charter)

................................................................................

(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:
................................................................................

2) Aggregate number of securities to which transaction applies:
................................................................................

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
................................................................................

4) Proposed maximum aggregate value of transaction:
................................................................................

5) Total fee paid:
................................................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
................................................................................

2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2

AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036

March 29, 1999

Dear Stockholder:

The Annual Meeting of Stockholders will be held at the Hess Office
Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on Wednesday, May 5,
1999, at 2:00 P.M., local time. The formal Notice of Annual Meeting and Proxy
Statement, which are contained in the following pages, outline the action to be
taken by the stockholders at the meeting.

You are cordially invited to attend this meeting. The Hess Office Building
may be reached, if you travel by car, from Exits 127 (northbound) and 130
(southbound) of the Garden State Parkway or Exit 11 of the New Jersey Turnpike
or, if you travel by train, from the Metropark station in Iselin, New Jersey.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. ACCORDINGLY, YOU ARE REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR COOPERATION WILL BE
APPRECIATED.

Sincerely yours,

<TABLE>
<S> <C>
/s/ W.S.H. Laidlaw
/s/ John B. Hess
Chairman of the Board President and
and Chief Executive Officer Chief Operating Officer
</TABLE>

/s/ Leon Hess
Chairman of the Executive Committee
<PAGE> 3

AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

WEDNESDAY, MAY 5, 1999, AT 2:00 P.M.

To the Stockholders:

The Annual Meeting of Stockholders of Amerada Hess Corporation will be held
at the Hess Office Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on
Wednesday, May 5, 1999, at 2:00 P.M., local time, for the following purposes:

1. To elect five directors for the ensuing three-year term (pages 1 to 16
of Proxy Statement);

2. To act upon the ratification of the selection by the Board of
Directors of Ernst & Young LLP as independent auditors (page 17); and

3. To transact any other business which properly may be brought before
the meeting.

All stockholders are cordially invited to attend, although only
stockholders of record at the close of business on March 15, 1999 will be
entitled to vote at the meeting.

By order of the Board of Directors,

Carl T. Tursi
Secretary

New York, New York
March 29, 1999

YOUR VOTE IS IMPORTANT

YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF PROXY,
SO THAT IF YOU ARE UNABLE TO ATTEND THE MEETING YOUR SHARES MAY NEVERTHELESS BE
VOTED.
<PAGE> 4

AMERADA HESS CORPORATION
PROXY STATEMENT

The enclosed proxy is solicited by the Board of Directors of Amerada Hess
Corporation (the "Corporation") for use at the Annual Meeting of Stockholders
(the "Annual Meeting") on May 5, 1999, at 2:00 P.M., local time.

The Corporation's principal executive office is located at 1185 Avenue of
the Americas, New York, New York 10036. The approximate date on which this Proxy
Statement is first being sent to stockholders is March 29, 1999.

You may revoke the proxy at any time prior to its use by delivering a
written notice to the Secretary of the Corporation, by executing a later-dated
proxy in a form permitted under Delaware law, or by attending the Annual Meeting
and voting in person. Proxies in the form enclosed, unless revoked prior to the
closing of polls for each matter upon which the stockholders will be entitled to
vote at the Annual Meeting, will be voted at the Annual Meeting in accordance
with the specifications made by you thereon or, in the absence of such
specifications, for the election of directors nominated herein and the proposal
to ratify the selection of Ernst & Young LLP ("Ernst & Young") as independent
auditors for the fiscal year ending December 31, 1999.

Holders of record of Common Stock, par value $1.00 per share ("Common
Stock"), of the Corporation at the close of business on March 15, 1999 will be
entitled to vote at the Annual Meeting. Each share of Common Stock will be
entitled to one vote. On March 15, 1999, there were 90,362,705 shares of Common
Stock outstanding. There are no other voting securities of the Corporation
outstanding. A majority of the outstanding shares of Common Stock, present in
person or represented by proxy, will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence of a quorum for the transaction of business.

ELECTION OF DIRECTORS

At the Annual Meeting, five directors are to be elected to serve for a term
of three years and until their successors are elected and qualified. It is
intended that proxies will be voted for the nominees set forth herein. Election
of directors shall be had by a plurality of the votes cast. Accordingly,
abstentions and broker non-votes will not affect tabulation of the vote for
directors. Although it is expected that all candidates will be able to serve, if
one or more are unable to do so, the proxy holders will vote the proxies for the
remaining nominees and for substitute nominees chosen by the Board of Directors
unless it reduces the number of directors to be elected.

The following table presents information as of February 3, 1999 on the
nominees for election as directors of the Corporation and the directors
continuing in their respective terms of office:

1
<PAGE> 5

NOMINEES FOR DIRECTOR

Class II

For Three-Year Term Expiring in 2002

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
---- ----------------------- --- -------- -------------------
<S> <C> <C> <C> <C>
Edith E. Holiday......... Attorney; Former Assistant 46 1993 Beverly Enterprises, Inc.
to the President of the Hercules, Incorporated
United States and Secretary H.J. Heinz Company
of the Cabinet; Director or trustee of
Former General Counsel, various Franklin
United States Department Templeton mutual
of the Treasury funds

W. S. H. Laidlaw......... President and Chief Operating 43 1994 Premier Oil plc
Officer

Roger B. Oresman......... Consulting Partner, 78 1969 --
Milbank, Tweed,
Hadley & McCloy LLP
(attorneys)

Robert N. Wilson......... Vice Chairman of the Board 58 1996 United States Trust
of Directors, Johnson & Corporation
Johnson

Robert F. Wright......... Former President and Chief 73 1981 --
Operating Officer of the
Corporation
</TABLE>

MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE

Class III

Term Expiring in 2000

John B. Hess............. Chairman of the Board and 44 1978 --
Chief Executive Officer

William R. Johnson....... President and Chief Executive 50 1996 Cincinnati Financial
Officer and Director, Corporation
H.J. Heinz Company PNC Bank

John Y. Schreyer......... Executive Vice President and 59 1990 --
Chief Financial Officer

William I. Spencer....... Former President and Chief 81 1982 --
Administrative Officer,
Citicorp and Citibank, N.A.
</TABLE>

2
<PAGE> 6
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE -- (Continued)

Class I
Term Expiring in 2001

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
---- ----------------------- --- -------- -------------------
<S> <C> <C> <C> <C>
Nicholas F. Brady....... Chairman, Darby Overseas 68 1994 C2, Inc.
Investments, Ltd. H.J. Heinz Company
(investment firm); Director or trustee of
Former Secretary of the various Templeton mutual
United States Department funds
of the Treasury;
Former Chairman of the
Board, Dillon, Read & Co.
Inc. (investment banking
firm)

J. Barclay Collins II... Executive Vice President and 54 1986 Dime Bancorp, Inc.
General Counsel

Leon Hess............... Chairman of the Executive 84 1968 --
Committee; Former Chairman
of the Board and Chief
Executive Officer of the
Corporation

Thomas H. Kean.......... President, Drew University; 63 1990 ARAMARK Corporation
Former Governor of the Bell Atlantic Corporation
State of New Jersey Fiduciary Trust Company
International
United HealthCare
Corporation

Frank A. Olson.......... Chairman of the Board and 66 1998 Becton Dickinson and
Chief Executive Officer, Company
The Hertz Corporation Fund American Enterprises
Holdings, Inc.
</TABLE>

All of the nominees and directors named above have held substantially the
positions or former positions indicated for the past five years, except as
described below. On May 3, 1995, Mr. Leon Hess resigned as Chairman of the Board
and Chief Executive Officer, Mr. John B. Hess, formerly Senior Executive Vice
President of the Corporation, was elected Chairman of the Board and Chief
Executive Officer, and Mr. Laidlaw, formerly an Executive Vice President of the
Corporation and Managing Director of its wholly-owned British subsidiary,
Amerada Hess Limited, was elected President and Chief Operating Officer of the
Corporation. Mr. Johnson served in various senior executive positions at H.J.
Heinz Company prior to his becoming President and Chief Executive Officer in
1998. Mr. Olson served in a variety of executive positions with The Hertz
Corporation or its affiliates since 1964.

Leon Hess is John B. Hess' father. Leon Hess may be deemed to be a control
person of the Corporation by virtue of his stock ownership. See "Ownership of
Equity Securities by Management."

The Audit Committee of the Board of Directors is composed of William I.
Spencer, Chairman, Edith E. Holiday, Thomas H. Kean and Robert N. Wilson. The
Audit Committee met three times in 1998. The Audit Committee reviews the audit
plan developed by the Corporation's independent auditors in connection with
their annual audit of the Corporation's financial statements, the results of
audits performed by the Corporation's independent auditors, the independent
auditors' charges to the Corporation, the response of management of the
Corporation to management letters issued by the

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<PAGE> 7

Corporation's independent auditors, current accounting rules and changes
therein, the operations of the Corporation's internal audit department, the
Corporation's audited financial statements and the implementation of the
Corporation's Business Practice Guide covering compliance with applicable laws
and Corporation policy. The Audit Committee also recommends the selection of
independent auditors to the Board of Directors each year.

The Board of Directors' Compensation Committee (the "Compensation
Committee") is composed of Nicholas F. Brady, Chairman, Peter S. Hadley, William
I. Spencer and Robert N. Wilson. The Compensation Committee met twice with
respect to 1998 business, once in 1998 and once in early 1999. The Compensation
Committee approves and administers the Corporation's compensation policies for
executive officers and approves the compensation of the Chief Executive Officer,
and in connection therewith is authorized to make awards of options, restricted
stock and other stock and cash compensation permitted under the 1995 Long-Term
Incentive Plan.

The Employee Benefits and Pension Committee of the Board of Directors is
composed of William I. Spencer, Chairman, Peter S. Hadley, Edith E. Holiday,
Thomas H. Kean and Roger B. Oresman. This Committee, which met once in 1998,
oversees the Corporation's benefit plans. It recommends to the Board of
Directors asset allocation targets and investment managers for the Employees'
Pension Plan and appoints investment managers for the Employees' Savings and
Stock Bonus Plan and the Savings and Stock Bonus Plan for Retail Operations
Employees.

The Directors and Board Affairs Committee of the Board of Directors is
composed of Nicholas F. Brady, Chairman, John B. Hess, Leon Hess, Edith E.
Holiday and Thomas H. Kean. This Committee is responsible for reviewing the size
and composition of the Board, as well as appropriate board practices and
procedures, board meeting content, frequency and length, and the composition and
function of committees of the Board of Directors. This Committee also recommends
for election as directors qualified candidates identified through various
sources. Stockholders may suggest candidates by writing to the Secretary of the
Corporation, including a brief summary of each candidate's qualifications. This
Committee did not meet in 1998.

The Board of Directors met ten times in 1998, and each director attended at
least 75% of the aggregate of all Board of Directors' meetings and all meetings
of committees of the Board of Directors on which he or she served during 1998.

CERTAIN TRANSACTIONS

The Corporation retained Milbank, Tweed, Hadley & McCloy LLP, of which Mr.
Oresman is a consulting partner, to provide legal services in 1998. It is
expected that the Corporation's dealings with this firm will continue in 1999.

In 1998, the Corporation sold petroleum products to The Hertz Corporation,
of which Mr. Olson is Chairman of the Board and Chief Executive Officer, in the
aggregate amount of $1,180,242 at competitive market prices. The Corporation
expects to continue to make such sales in 1999.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

In March, 1999, Mr. William I. Spencer filed a Form 4 for May 1998
reporting the purchase in May 1998 of 1,000 shares of Common Stock. This
purchase should have been reported on a Form 4 filed by Mr. Spencer by June 10,
1998.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF COMPENSATION

The following table sets forth information on cash and other compensation
paid or accrued for each of the fiscal years ended December 31, 1998, 1997 and
1996 to the Chief Executive Officer and the four most highly compensated
executive officers other than the Chief Executive Officer, for services in all
capacities to the Corporation and its subsidiaries.

4
<PAGE> 8

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------- -------------------------------------
AWARDS PAYOUTS
------------------------ ----------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL ANNUAL AWARD(S)($) OPTIONS/ LTIP COMPENSATION($)
POSITION YEAR SALARY($) BONUS($)* COMPENSATION($)** *** SARS(#) PAYOUTS($) ****
- ---------------------- ---- --------- --------- ----------------- ----------- ---------- ---------- ---------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ---------------------- ---- --------- --------- ----------------- ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John B. Hess,......... 1998 1,000,000 300,000 -- -- 100,000 -- 8,000
Chairman of the 1997 1,000,000 500,000 -- 2,737,500 150,000 -- 8,000
Board and Chief 1996 1,000,000 200,000 -- -- 105,000 -- 7,500
Executive Officer

W. S. H. Laidlaw,..... 1998 900,000 250,000 -- -- 65,000 -- 8,000
President and Chief 1997 900,000 400,000 -- 2,190,000 120,000 -- 8,000
Operating Officer 1996 900,000 150,000 39,250 -- 70,000 -- 7,500

J. Barclay Collins,... 1998 650,000 100,000 -- -- 40,000 -- 8,000
Executive Vice 1997 650,000 150,000 -- 1,368,750 75,000 -- 8,000
President and 1996 650,000 75,000 -- -- 28,000 -- 7,500
General Counsel

John Y. Schreyer,..... 1998 650,000 100,000 -- -- 40,000 -- 8,000
Executive Vice 1997 650,000 150,000 -- 1,368,750 75,000 -- 8,000
President and 1996 650,000 75,000 -- -- 28,000 -- 7,500
Chief Financial
Officer

Francis R. Gugen,+.... 1998 539,000 21,000 -- -- 10,000 -- 13,258
Managing Director, 1997 491,000 41,000 -- 540,750 30,000 -- 13,101
Amerada Hess 1996 406,000 -- -- -- 9,500 -- 12,486
Limited ("AHL")
</TABLE>

- ---------------

* As explained under "Compensation Committee Report on Executive
Compensation", the cash bonuses shown above for 1998, 1997 and 1996 were
paid in early 1999, 1998, and 1997, respectively, and vary from amounts
reported for 1997 and 1996 in prior years.

** In connection with Mr. Laidlaw's overseas employment through May 3, 1995,
the Corporation made payments on behalf of Mr. Laidlaw to United Kingdom
taxing authorities equal to the difference between Mr. Laidlaw's actual
United Kingdom income tax liability and a notional United States income
tax on his compensation. These disbursements made in 1996 (for prior tax
years), based on the average dollar-sterling exchange rate for such year,
amounted to approximately $39,250.

*** At December 31, 1998, the named executives each held shares of restricted
Common Stock, subject to vesting pursuant to the Corporation's Executive
Long-Term Incentive Compensation and Stock Ownership Plan (the "Restricted
Stock Plan"), which expired as to the granting of further awards in 1997,
in the following amounts and having the following aggregate market values
at such date: Mr. J. B. Hess, 70,000 shares, $3,482,500; Mr. Laidlaw,
60,000 shares, $2,985,000; Mr. Collins, 35,000 shares, $1,741,250; Mr.
Schreyer, 35,000 shares, $1,741,250 and Mr. Gugen, 7,000 shares, $348,250.
Additionally, at December 31, 1998, Mr. Gugen held 10,000 shares of
restricted Common Stock, subject to vesting pursuant to the Corporation's
1995 Long-Term Incentive Plan, having a market value of $497,500 at such
date. To the extent paid on the Corporation's Common Stock generally,
dividends accrue on shares of restricted stock and are held in escrow
until vesting, at which time they are paid, together with interest accrued
thereon at short-term market rates, to the named executives. At December
31, 1998, the named executives held book value appreciation units under
the Restricted Stock Plan in the following amounts and having no market
value at such date: Mr. J. B. Hess, 70,000 units; Mr. Laidlaw, 60,000
units; Mr. Collins, 35,000 units; Mr. Schreyer, 35,000 units; and Mr.
Gugen, 7,000 units. Each book value appreciation unit entitles the holder
to a cash payment equal to the increase, if any, in the book value per
share of Common Stock over the five-year vesting period of the restricted
stock.

5
<PAGE> 9

**** Amounts shown in column (i) represent matching contributions of the
Corporation credited to the named executive officers under the
Corporation's Employees' Savings and Stock Bonus Plan, or in the case of
Mr. Gugen, under AHL's Stock Purchase Plan.

+ Mr. Gugen's cash compensation is paid in pounds sterling. All amounts shown
for Mr. Gugen are based on the average dollar-sterling exchange rate for
the applicable year.

STOCK OPTIONS

Effective February 3, 1999, the Compensation Committee approved as
compensation in respect of 1998 awards of non-qualified stock options to certain
officers and other employees under the Corporation's 1995 Long-Term Incentive
Plan (the "Incentive Plan"), approved by the stockholders of the Corporation in
1996. These stock options are not currently exercisable. No stock appreciation
rights were granted to executive officers for 1998. The following table sets
forth information concerning individual grants of stock options made under the
Incentive Plan in respect of the last fiscal year to each of the named executive
officers, including those awarded in February 1999:

OPTION/SAR GRANTS IN LAST FISCAL YEAR*

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE VALUE($)**
(a) (b) (c) (d) (e) (f)
---- ------------ ---------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John B. Hess,..................... 100,000 19.8 49.19 2/03/09 1,494,000
Chairman of the Board and
Chief Executive Officer

W. S. H. Laidlaw,................. 65,000 12.9 49.19 2/03/09 971,100
President and Chief Operating
Officer

J. Barclay Collins,............... 40,000 7.9 49.19 2/03/09 597,600
Executive Vice President

John Y. Schreyer,................. 40,000 7.9 49.19 2/03/09 597,600
Executive Vice President

Francis R. Gugen,................. 10,000 2.0 49.19 2/03/09 149,400
Managing Director, AHL
</TABLE>

- ---------------
* This table includes information about stock options awarded by the
Compensation Committee effective February 3, 1999 as part of compensation in
respect of the last fiscal year. These options become fully exercisable
February 3, 2000, except that options may become exercisable earlier in full
in cases of death, disability, normal retirement or change of control (as
described in the Incentive Plan). At the discretion of the Compensation
Committee, upon early retirement of an awardee, options not then exercisable
may become exercisable in proportion to the amount of time elapsed in the
non-exercisability period to the early retirement date. Such options remain
exercisable until February 3, 2009, except in cases of death, disability,
retirement or other termination of employment, in which case options remain
exercisable only for certain specified periods thereafter. If an awardee's
employment terminates prior to such options becoming exercisable, such
options will be forfeited.

** The Grant Date Present Values shown in the above table have been determined,
as permitted under applicable rules of the Securities and Exchange
Commission, using the Black-Scholes option pricing model. This model, like
all pricing models, requires certain assumptions, and therefore the amounts
shown should not necessarily be considered indicative of the present value of
the amounts that may actually be realized. The following assumptions were
made for purposes of this valuation for February 1999 option grants: expected
life of seven years for each option; volatility of 21.4%

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<PAGE> 10

(based on historical volatility of the Common Stock over the seven-year
period ending January 31, 1999); risk-free rate of return of 4.91%; and
dividend yield of 1.22%.

The following table sets forth information as to the named executives
regarding the values of unexercised options under the Incentive Plan as of the
end of the last fiscal year:

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS/ IN-THE-MONEY
ACQUIRED ON VALUE SARS AT FY-END(#) OPTIONS/SARS AT FY-END($)
NAME EXERCISE(#) REALIZED($) (EXERCISABLE/UNEXERCISABLE)* (EXERCISABLE/UNEXERCISABLE)
(a) (b) (c) (d) (e)
---- ----------- ----------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C>
John B. Hess,................ -- -- 329,000/75,000 0/0
Chairman of the Board and
Chief Executive Officer

W. S. H. Laidlaw,............ -- -- 220,000/60,000 0/0
President and Chief
Operating Officer

J. Barclay Collins,.......... -- -- 110,500/37,500 0/0
Executive Vice President

John Y. Schreyer,............ -- -- 110,500/37,500 0/0
Executive Vice President

Francis R. Gugen,............ -- -- 36,000/15,000 0/0
Managing Director, AHL
</TABLE>

- ---------------
* Excludes options granted February 3, 1999.

RETIREMENT PLANS

The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age under the Corporation's
Employees' Pension Plan (the "Pension Plan"), a qualified defined benefit
pension plan, as well as a nonqualified supplemental plan that provides
benefits, paid from a trust established and funded by the Corporation, that
would otherwise be paid to participants under the Pension Plan but for certain
limitations on qualified plan benefits and compensation imposed by the Internal
Revenue Code of 1986, as amended (the "Code"), based on remuneration that is
covered under the Pension Plan and supplemental plan and years of service:

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 500,000 120,000 160,000 200,000 240,000 280,000
600,000 144,000 192,000 240,000 288,000 336,000
700,000 168,000 224,000 280,000 336,000 392,000
800,000 192,000 256,000 320,000 384,000 448,000
900,000 216,000 288,000 360,000 432,000 504,000
1,000,000 240,000 320,000 400,000 480,000 560,000
1,200,000 288,000 384,000 480,000 576,000 672,000
1,400,000 336,000 448,000 560,000 672,000 784,000
1,600,000 384,000 512,000 640,000 768,000 896,000
</TABLE>

A participant's remuneration covered by the Pension Plan and the
supplemental plan is twelve times the participant's average monthly compensation
(as reported on an annual basis in columns (c) and (d) of the Summary
Compensation Table) in the 36 consecutive months (or the number of consecutive
months of employment, if fewer) of highest compensation during the 60 months
immediately preceding the participant's retirement date. Benefits shown are
computed as a straight life annuity beginning at age 65 and do not reflect the
offset for a portion of social security benefits as required under the Pension
Plan. Covered compensation for the named executives (other than

7
<PAGE> 11

Mr. Gugen) as of December 31, 1998 was: Mr. J. B. Hess: $1,233,333; Mr. Laidlaw:
$1,083,333; Mr. Collins: $725,000; and Mr. Schreyer: $725,000.

The following table shows the estimated annual pension payable to a covered
participant at normal retirement age under the Amerada Hess Limited Pension Plan
(the "AHL Pension Plan"), a United Kingdom tax-approved defined benefit plan,
based on remuneration that is covered under the AHL Pension Plan and years of
service:

AHL PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------
REMUNERATION 15 20 25 30 35
------------ -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$500,000................................. 138,750 185,000 231,250 277,500 323,750
600,000................................. 166,500 222,000 277,500 333,000 388,500
700,000................................. 194,250 259,000 323,750 388,500 453,250
</TABLE>

For participants who joined the UK Pension Plan prior to 1 June 1989, the
remuneration covered by the UK Pension Plan is their highest annual rate of
basic salary (as reported in column(c) of the Summary Compensation Table) within
the final 5 years preceding the participant's retirement date. As required by UK
legislation, the covered remuneration for other participants is restricted to an
earnings cap. The pension shown is the amount payable from age 65 which carries
entitlement to a reversionary spouse's pension and is subject to annual cost of
living adjustments in accordance with UK legislation. All benefits payable from
the UK Pension Plan are subject to overriding restrictions laid down by the
Inland Revenue. Covered remuneration for Mr. Gugen as of December 31, 1998 was
$539,000 based on the 1998 average dollar-sterling exchange rate.

The years of credited service for the named executives (other than Mr.
Gugen) under the Pension Plan and, except for Mr. Schreyer, the supplemental
plan as of February 3, 1999 are as follows: J. B. Hess, 21 years; W. S. H.
Laidlaw, 17 years; J. B. Collins, 14 years; and J. Y. Schreyer, 8 years. As of
February 1, 1998, Mr. Schreyer had 34 years of credited service under the
supplemental plan pursuant to a determination of the Compensation Committee,
which gave Mr. Schreyer credit for 26 years of prior service with his previous
employer for purposes of determining benefits payable under the supplemental
plan. However, retirement benefits payable to Mr. Schreyer in connection with
his prior employment will be deducted from benefits payable under the
supplemental plan.

As of March 1, 1999, Mr. Gugen had 17 years of credited service under the
AHL Pension Plan.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS

Mr. Schreyer has an agreement with the Corporation which provides credit
for prior service and determines benefits payable under the Corporation's
nonqualified supplemental retirement plan, as more fully described above under
"Retirement Plans".

Awards granted to employees under the Incentive Plan, including the named
executive officers, are subject to accelerated vesting and cash-out upon the
occurrence of a Change of Control, as defined in the Incentive Plan.

DIRECTORS' COMPENSATION

Each director who is not an employee of the Corporation or any of its
subsidiaries receives an annual fee of $55,000 for membership on the Board of
Directors and a fee of $1,000 for each Board of Directors' and Stockholders'
meeting attended. Each such director receives an additional annual fee of $4,000
for membership on each committee of the Board of Directors on which such
director serves and a fee of $1,000 for each committee meeting attended, except
that each such director who is a member of the Executive Committee receives an
additional annual fee of $75,000, but no fee for each

8
<PAGE> 12

meeting attended. The members of the Executive Committee are Leon Hess,
Chairman, Nicholas F. Brady, John B. Hess, Thomas H. Kean, W. S. H. Laidlaw,
John Y. Schreyer, William I. Spencer and Robert F. Wright. Messrs. L. Hess, J.
B. Hess, Laidlaw and Schreyer are employees of the Corporation and receive no
additional compensation for serving on any committee of the Board of Directors.

In addition, in an effort to increase the commonality of interests of
outside directors and stockholders, in 1997 the Board of Directors approved a
plan to award each non-employee director 200 shares of Common Stock of the
Corporation each year commencing in 1998. Such awards were made in January 1998
and January 1999 from treasury shares purchased by the Corporation in the open
market.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors of the Corporation is
responsible for approving and administering the Corporation's compensation
policies for executive officers and approving the compensation of the Chief
Executive Officer of the Corporation. The following report was prepared by the
Compensation Committee after its meeting on February 3, 1999 and the
Compensation Committee reported to the Board of Directors at its meeting held
February 3, 1999.

Executive Compensation Policies. The Corporation's executive compensation
policies are designed to attract and retain executives and motivate them to
achieve the Corporation's business goals through a combination of cash and
stock-based compensation. The key elements of executive compensation consist of
cash salary, cash bonuses, stock option awards, and restricted stock awards. The
Compensation Committee also takes into account the full compensation package
afforded to each executive, including retirement benefits and other benefits
generally available to all eligible employees such as the Corporation's matching
contributions under the Employees' Savings and Stock Bonus Plan and group life
insurance and health benefits. In 1998, independent consultants continued to
study the Corporation's compensation policies and review and develop strategies
to relate a greater portion of compensation to corporate and business unit
performance.

Cash Compensation. In 1998, the Compensation Committee restructured the
cash compensation paid to executive officers by approving the implementation of
an annual cash bonus plan for corporate executives, including executive
officers. The goal of this plan is to relate a greater portion of cash
compensation to corporate performance. Historically, the Corporation relied on
base salary as the predominant element of cash compensation. Cash bonuses were
paid only in exceptional circumstances to reward extraordinary effort by an
individual or for performance that was particularly beneficial to the
Corporation. Prior to implementation of the new bonus plan, discretionary cash
lump-sum payments were made to the five most highly compensated executive
officers in early 1997 and to most executive officers in early 1998 as first
steps in introducing an annual cash bonus. These lump-sum payments were not
based on any particular measure of corporate performance but rather were
determined largely by reference to levels of peer group cash compensation.

In connection with the implementation of this annual cash bonus program,
the Compensation Committee recognized that it was necessary to change the manner
in which cash bonuses are reported. In the past, cash bonuses were reported as
compensation for the year in which they were received. The Compensation
Committee believes that this presentation was appropriate, as such bonuses were
not formally linked to performance in any particular year. However, a cash bonus
program based on performance for the prior fiscal year, such as the
Corporation's new annual cash bonus program, must necessarily be retrospective,
and cash payments made in early 1999 should be viewed as compensation for 1998.
This transition from cash to accrual reporting could cause an overstatement of
the amount that the Compensation Committee believes should rightly be viewed as
1998 cash incentive compensation if both the cash bonuses paid under the annual
cash bonus program in early 1999 as well as the discretionary lump-sum payments
made in early 1998 were counted as 1998 compensation. Consequently, the
Compensation Committee determined that cash bonuses and lump-sum payments should
be presented on a consistent, retrospective basis for all periods shown in the
Summary Compensation Table. Accordingly, the lump-sum payments made in early
1998 and 1997 have been reclassified in each case as relating to the previous
year. While this presentation is inconsistent with
9
<PAGE> 13

the cash bonus compensation for 1997 and 1996 as reported in prior years, the
Compensation Committee believes that it better relates cash bonus compensation
to the most recent corporate results, more accurately reflects trends in cash
bonus compensation for the Corporation's executive officers in view of such
results and facilitates the ongoing comparability of such compensation.

Salary. In the past, salaries were targeted to deliver cash compensation
at the 75th percentile of that of a group of surveyed industrial companies, in
recognition of the Corporation's need to remain competitive in attracting and
retaining talented executives to work as part of a small management team
functioning in a demanding corporate and market environment. While it remains
the Corporation's goal to target total cash compensation at this level, the
intent of the bonus program is to target the base salary component of cash
compensation at a lower percentile of total cash compensation of the surveyed
companies and to rely on annual cash bonuses to provide the remaining cash
compensation if performance incentives under the bonus program are met. Base
salary remains an important element of executive compensation. In determining
salary levels for executive officers, the Compensation Committee considers the
following subjective and quantitative factors:

- job level and responsibility;

- recent corporate performance, including results of operations, success in
implementing corporate strategy and long-term goals and development of
future strategies; and

- an objective of targeting salary at between the 50th and 60th percentile
of total cash compensation as shown in surveys of a group of companies
compiled by an independent consultant.

For 1998, the Compensation Committee relied on two surveys: first, a survey of
over 600 industrial companies with revenues comparable to the Corporation (which
group included four companies also included in Standard & Poor's Oil (Domestic
Integrated) -- 500 Stock Index discussed under "Performance Graph" (the
"Industrial Company Survey")), and second, a survey comprising major integrated
oil and gas companies (which group included six companies also included in such
stock index (the "Oil Industry Group Survey" and collectively, the "Surveys")).
Consistent with the intent to place greater reliance on the annual cash bonus
plan, salary increases were granted to only three of the Corporation's 15
executive officers in 1998.

Cash Bonus. The annual cash bonus plan approved by the Compensation
Committee for 1998 for executive officers, including the named executive
officers, has both quantitative and discretionary elements. Fifty percent of the
bonus is based on attainment of a specified target level of a quantitative
corporate performance measure, namely, net income before interest and special
items, and the other fifty percent of the bonus is discretionary. Certain
executive officers, including one of the named executive officers, also
participate in the cash bonus programs of their business units, and in such
cases, one-third of the executive officer's cash bonus is based on attainment of
the corporate performance measure, one-third is based on attainment of a
specified performance measure for such executive officer's business unit, and
one-third is discretionary. The weightings were developed to provide for a
quantifiable performance incentive, but also to permit discretion to adjust
compensation for individual performance relative to peers, unusual competitive
market demands for specific skills, and unforeseen conditions such as a material
change in the price assumptions underlying the quantitative component.

No payouts were made for 1998 in respect of attainment of the quantitative
performance measure because of the Corporation's substantial operating loss for
1998. However, recognizing that the operating loss was due in large part to a
severe worldwide decline in the price of crude oil and refined petroleum
products and the slippage of production schedules on oil and gas properties,
both of which events were largely beyond the control of the executive officers,
the Compensation Committee recommended the payment of discretionary bonuses to
executive officers in an aggregate amount of $900,000. The cash bonus for each
individual executive officer was approximately 36% lower on average than the
discretionary cash lump-sum payment made for 1997.

10
<PAGE> 14

Total cash compensation for 1998 including salary and bonuses decreased
4.5% on average for all executive officers and 18% on average for the named
executive officers. Cash compensation in excess of $1 million to the named
executive officers is not deductible for federal income tax purposes.

Long-Term Compensation -- Incentive Plan. The Incentive Plan was developed
to align senior management's compensation more closely with the interests of
stockholders. The guiding principle was to develop a program that would be:

- stock-based

- performance-oriented

- accounting and cost efficient

- competitive with that of other major companies

- clear, concise and understandable to stockholders

The Incentive Plan was adopted by the Board of Directors at its December
1995 board meeting and approved by stockholders at the 1996 annual meeting. The
Incentive Plan is a broad-based plan that provides the Compensation Committee
with authority to grant various types of stock-based and other compensation,
including performance awards, stock options, restricted stock, deferred stock,
dividend equivalents and stock appreciation rights. The Compensation Committee
believes that a plan of this type affords the Compensation Committee the
flexibility to design compensation packages that provide appropriate
remuneration to attract and retain talented executives, while at the same time
providing incentives to maximize shareholder value. The Incentive Plan initially
reserved for issuance 4,500,000 shares of Common Stock, of which 105,000 remain
available for future awards.

Awards under the Incentive Plan to executive officers have been primarily
option-based, as the Compensation Committee determined this would align
executive and stockholder interests most closely, and would be most accounting
efficient in that no charge to earnings is recorded upon the grant of stock
options. The Compensation Committee's reliance on stock options for a
significant portion of long-term compensation reflects a growing trend toward
greater use of stock options by large industrial companies, including major oil
companies.

Long-Term Compensation -- 1998 Awards. For 1998, the Compensation
Committee approved a long-term compensation program for its executive officers
consisting exclusively of stock options. Recognizing the negative impact of the
severe downturn in worldwide crude oil and refined product prices, the
Compensation Committee determined that the 1998 long-term compensation program
would be more modest than that in previous years. However, the Compensation
Committee was also cognizant of management's achievement in 1998 of significant
strategic initiatives envisioned in 1995 to increase returns on capital employed
and enhance profitability, such as completion of a key refining joint venture,
and of the need to reward such achievements and provide incentives for their
continued implementation.

Accordingly, the Compensation Committee granted awards of stock options
with an exercise price at the market price on the grant date, reflecting the
Compensation Committee's preference for a simple, motivational long-term
compensation program. Although the objective is generally to target long-term
compensation at the 75th percentile of such compensation among surveyed
companies, the grant-date present value of 1998 stock option awards fall
considerably short of this level, reflecting 1998 results of operations. The
performance-based nature of the options will permit any compensation paid in
respect of the options to a named executive in a fiscal year in excess of $1
million to be deductible by the Corporation for federal income tax purposes.

The Compensation Committee approved awards on a discretionary basis of an
aggregate of 505,000 options in February 1999, of which 310,000 options were
awarded to executive officers. The Compensation Committee also approved awards
of 25,000 shares of Restricted Stock for 1998, none of which were to executive
officers.

11
<PAGE> 15

Other Benefit Plans. The Corporation has adopted certain broad-based
employee benefit plans in which executive officers are permitted to participate
on the same terms as other eligible employees of the Corporation, subject to
applicable limits imposed on contributions and benefits under the Code. In
addition to group life insurance and health benefit plans, the Corporation has
adopted the Employees' Savings and Stock Bonus Plan, approved by stockholders in
1981, under which executive officers can generally elect to invest on a pre-tax
or after-tax basis up to 5% of salary in seven funds, one of which invests in
Common Stock, and the Corporation provides matching contributions up to 5% of
salary for each participant, all of which are invested in Common Stock. The
Corporation believes that this matching structure helps to align the financial
interests of all participants with those of stockholders to encourage them to
work toward enhancing the value of the Common Stock.

Compensation of the Chief Executive Officer. Mr. John B. Hess' cash
compensation for 1998 was established in the manner discussed above for all
executive officers. Mr. John B. Hess' combined salary and bonus for 1998 were
well below the total cash compensation at the 75th percentile for chief
executive officers in both the Industrial Company Survey and the Oil Industry
Group Survey. His total cash compensation would fall below this percentile even
if Mr. Hess' 1997 cash bonus, paid in early 1998, were included.

In approving the award of stock options shown in the Summary Compensation
Table to Mr. John B. Hess for 1998, the Compensation Committee again followed
the principles set forth above in establishing long-term compensation for all
executive officers in 1998. Based on comparative analyses of long-term peer
compensation as published in the Surveys, the total present value of Mr. John B.
Hess' long-term compensation (based on expected option values derived from the
consultant's pricing model) was well below the 75th percentile of such
compensation for chief executive officers in the Surveys.

The Compensation Committee concluded that the total of Mr. John B. Hess'
1998 cash compensation and the grant date present value of his long-term
compensation was reasonable compared with that of his peers and appropriate in
view of the success of the critical corporate initiatives he has overseen in the
face of extremely adverse market conditions.

Nicholas F. Brady

Peter S. Hadley

William I. Spencer

Robert N. Wilson

12
<PAGE> 16

PERFORMANCE GRAPH

Set forth below is a line graph comparing the cumulative total shareholder
return, assuming reinvestment of dividends, on the Corporation's Common Stock
with the cumulative total return, assuming reinvestment of dividends, of the
Standard & Poor's 500 Stock Index, which includes the Corporation, and the
cumulative total return, assuming reinvestment of dividends, of Standard &
Poor's Oil (Domestic Integrated) - 500 Stock Index, a published industry index
which includes the Corporation, as of each December 31 over a five-year period
commencing on December 31, 1993 and ending on December 31, 1998:

TOTAL SHAREHOLDER RETURNS
(DIVIDENDS REINVESTED)
YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
S&P OIL
(DOMESIC
AMERADA HESS S&P 500 STOCK INTEGRATED) - 500
CORPORATION INDEX STOCK INDEX
<S> <C> <C> <C>
1993 100.00 100.00 100.00
1994 102.42 101.32 104.92
1995 120.41 139.40 119.46
1996 132.93 171.40 151.07
1997 127.40 228.59 179.75
1998 116.77 293.91 145.93
</TABLE>

13
<PAGE> 17

OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of the most recent practicable date,
information as to the ownership of more than 5% of any class of the
Corporation's voting securities by beneficial owners known by the Corporation to
hold more than 5% of any such class:

<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP(a) OF CLASS
-------------- ---------------- ------------ --------
<S> <C> <C> <C>
Common Stock............ FMR Corp. 13,636,963(b) 15.09
Edward C. Johnson 3d
Abigail P. Johnson
c/o FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109

Common Stock............ Leon Hess 11,677,705(c) 12.9
c/o Amerada Hess Corporation
1185 Avenue of the Americas
New York, New York 10036

Common Stock............ T. Rowe Price Associates, Inc. 6,050,250(d) 6.6
100 E. Pratt Street
Baltimore, Maryland 21202

Common Stock............ Dodge & Cox 5,974,316(e) 6.6
One Sansome St., 35th Fl.
San Francisco, CA 94104
</TABLE>

- ---------------

(a) The information in the above table and in the notes thereto was
obtained, with respect to FMR Corp. et al., Dodge & Cox, and T. Rowe Price
Associates, Inc. ("Price Associates"), from Schedules 13G filed by such
reporting persons with the Securities and Exchange Commission in February 1999.
Information with respect to Mr. Leon Hess is as of February 3, 1999, and with
respect to FMR Corp. et al., Dodge & Cox and Price Associates is as of December
31, 1998.

(b) These shares represent the total number of shares reported as
beneficially owned in a joint filing on Schedule 13G by the above listed
reporting persons. These shares include 679,163 shares as to which one or more
of such beneficial owners have sole voting power and 13,636,963 shares as to
which one or more of them have sole dispositive power. FMR Corp. controls
Fidelity Management & Research Company ("Fidelity"), a wholly-owned subsidiary
of FMR Corp. and a registered investment adviser, which is the beneficial owner
of 12,827,800 shares of Common Stock of the Corporation as a result of acting as
investment adviser to various registered investment companies. FMR Corp. also
controls Fidelity Management Trust Company, a wholly-owned bank subsidiary which
is the beneficial owner of 786,313 shares of Common Stock of the Corporation.

Members of the Edward C. Johnson 3d family and trusts for their benefit are
the predominant owners of Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. Mr. Johnson 3d
owns 12.0% and Abigail P. Johnson owns 24.5% of the aggregate outstanding voting
stock of FMR Corp. Mr. Johnson 3d is Chairman of FMR Corp. and Abigail P.
Johnson is a Director of FMR Corp. Members of the Johnson family, through their
ownership of voting common stock and the execution of a shareholders' voting
agreement among the Johnson family group and all other Class B shareholders, may
be deemed, under the Investment Company Act of 1940, to form a controlling group
with respect to FMR Corp. The number of shares reported in the table above

14
<PAGE> 18

with respect to such beneficial owners includes 22,850 shares owned directly by
Mr. Johnson or in Johnson family trusts.

(d) These securities are owned by various individual and institutional
investors which Price Associates serves as investment adviser with power to
direct investments and/or sole power to vote the securities. For purposes of the
reporting requirements of the Securities Exchange Act of 1934, Price Associates
is deemed to be a beneficial owner of such securities; however, Price Associates
expressly disclaims that it is, in fact, the beneficial owner of such
securities. Price Associates has sole voting power with respect to 1,338,688
shares and sole dispositive power with respect to 6,050,250 shares.

(e) This amount includes 5,451,976 shares as to which such beneficial owner
has sole voting power, 64,200 shares as to which such beneficial owner has
shared voting power, and 5,974,316 shares as to which such beneficial owner has
sole dispositive power.

OWNERSHIP OF EQUITY SECURITIES BY MANAGEMENT

The table below sets forth as to each director and named executive officer,
and all directors and executive officers as a group, information regarding their
ownership of equity securities of the Corporation on February 3, 1999. The
persons listed below each have sole voting and investment power as to all shares
indicated except as set forth in the footnotes to the table. Where no
information appears in the column "Percent of Outstanding Shares of Common Stock
Owned," the securities held represent less than one percent of the Common Stock.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
OWNERSHIP OF SHARES OF
COMMON COMMON
STOCK(a) STOCK OWNED
NAME ------------ -----------
- ------
<S> <C> <C>
Nicholas F. Brady...................................... 1,400 --
J. Barclay Collins II.................................. 183,363 --
Francis R. Gugen....................................... 65,900 --
Peter S. Hadley........................................ 1,469(b) --
John B. Hess........................................... 2,005,418(c) 2.2
Leon Hess.............................................. 9,627,644 10.6
2,050,061(d) 2.3
Edith E. Holiday....................................... 1,400 --
William R. Johnson..................................... 1,400 --
Thomas H. Kean......................................... 2,400 --
W. S. H. Laidlaw....................................... 382,221(e) --
Frank A. Olson......................................... 1,200 --
Roger B. Oresman....................................... 10,948 --
John Y. Schreyer....................................... 198,873 --
William I. Spencer..................................... 1,900 --
Robert N. Wilson....................................... 2,100 --
Robert F. Wright....................................... 120,489 --
All directors and executive officers as a group........ 15,098,964 16.5
</TABLE>

- ---------------

(a) These figures include 362 shares vested in the name of Mr. Collins,
11,643 shares vested in the name of Mr. J. B. Hess, 5,521 shares vested
in the name of Mr. Laidlaw, 2,873 shares vested in the name of Mr.
Schreyer, and 34,498 shares vested for all executive officers and
directors as a group under the Corporation's Employees' Savings and
Stock Bonus Plan, as to which these individuals and the group have
investment power but generally do not have voting power, except with
respect to shares purchased with each such individual's own
contributions, which will be voted by the plan trustee in accordance
with such individual's written instructions, and 1,400 shares vested in
the name of Mr. Gugen under AHL's Stock Purchase Plan, as to which Mr.
Gugen has voting and investment power. These amounts also include 25,000
shares

15
<PAGE> 19

held in escrow under the Restricted Stock Plan for Mr. Collins, 10,000
shares held in escrow under the Incentive Plan for Mr. Gugen, 50,000
shares held in escrow under the Restricted Stock Plan for Mr. J. B.
Hess, 40,000 shares held in escrow under said Plan for Mr. Laidlaw,
25,000 shares held in escrow under said Plan for Mr. Schreyer, and
192,000 shares held in escrow under said Plan and 35,000 shares held in
escrow under the Incentive Plan for all executive officers and directors
as a group, as to which these individuals and the group have voting
power but not investment power. These amounts also include shares
underlying options to purchase Common Stock of the Corporation,
exercisable within 60 days of the date as of which this information is
provided, awarded under the Incentive Plan in the following amounts: Mr.
Collins, 148,000 shares, Mr. Gugen, 51,000 shares, Mr. John B. Hess,
404,000 shares, Mr. Laidlaw, 280,000 shares, Mr. Schreyer, 148,000
shares, and all executive officers and directors as a group, 1,310,500
shares. Holders of stock options do not have the right to vote or any
other right of a stockholder with respect to shares of Common Stock
underlying such options until such options are exercised.

(b) Mr. Hadley holds these shares jointly with his wife and shares voting
and investment power.

(c) This figure includes 1,280,094 shares held by a family corporation, the
preferred stock of which is held by a trust of which Mr. J. B. Hess is
trustee and 33 1/3% of the common stock of which is owned by Mr. J. B.
Hess. The preferred stock of such corporation has 99% of the total
voting power of all classes of stock of such corporation. As trustee Mr.
J. B. Hess has voting power and investment power with respect to such
preferred stock. Mr. J. B. Hess' mother is the beneficiary of this trust
and Mr. Leon Hess has a remainder interest therein. This figure also
includes 63,291 shares held by a trust for the benefit of Mr. J. B. Hess
and his children, of which Mr. J. B. Hess is trustee.

(d) This figure includes 175,218 shares held by five corporations
(including that referred to in note (e) below) of which Mr. Leon Hess is
an officer, director and owner of voting preferred stock having at least
80% of the total voting power of all classes of stock and 31,016 shares
held by five trusts of which Mr. Leon Hess is trustee. It also includes
1,843,827 shares held by Hess Foundation, Inc. of which Mr. Leon Hess is
an officer and a director. It excludes 107,286 shares held by Capitol
Street Corporation, a corporation in which Mr. Hess indirectly owns a
minority equity interest. Mr. Hess disclaims beneficial ownership of
such shares. Mr. Leon Hess' address is in care of the Corporation, 1185
Avenue of the Americas, New York, New York 10036.

(e) Mr. Laidlaw also owns the common stock of a corporation, the preferred
stock of which is owned by Mr. Leon Hess, which owns 35,000 shares of
Common Stock. The preferred stock has more than 92% of the total voting
power of all classes of stock of this corporation.

16
<PAGE> 20

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

Based on the recommendation of its Audit Committee, the Board of Directors
has selected the firm of Ernst & Young LLP as the independent auditors of the
Corporation for the fiscal year ending December 31, 1999. Ernst & Young LLP has
acted for the Corporation in such capacity since November 1, 1971. The Board
proposes that the stockholders ratify such selection at the Annual Meeting.

If the stockholders do not ratify the selection of Ernst & Young LLP, the
selection of independent auditors will be reconsidered by the Board of
Directors.

Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will be afforded the opportunity to make a statement if they
desire and will be available to respond to appropriate questions.

OTHER MATTERS

The Board of Directors knows of no other matters to come before the
meeting. Should any unanticipated business properly come before the meeting, the
persons named in the enclosed form of proxy will vote in accordance with their
best judgment. The accompanying proxy confers discretionary authority to such
persons to vote on any such unanticipated matters.

The cost of preparing and mailing this Proxy Statement and the accompanying
proxy and the cost of solicitation of proxies on behalf of the Board of
Directors will be borne by the Corporation. Solicitation will be made by mail.
Some personal solicitation may be made by directors, officers
and employees without special compensation, other than reimbursement for
expenses. In addition, D. F. King & Co. has been retained to aid in the
solicitation. The fees of said organization for this solicitation are not
expected to exceed $20,000, exclusive of expenses.

Proposals which stockholders wish to include in the Corporation's proxy
materials relating to the 2000 Annual Meeting of Stockholders must be received
by the Corporation no later than November 30, 1999.

It is important that proxies be returned promptly. Stockholders are urged
to date and sign the enclosed proxy and return it promptly in the accompanying
envelope.

By order of the Board of Directors,

CARL T. TURSI
Secretary
New York, New York
March 29, 1999

17
<PAGE> 21

Amerada Hess Corporation
PROXY
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 5, 1999

The undersigned hereby appoints JOHN B. HESS, W.S.H. LAIDLAW and LEON HESS,
or any of them, proxies each with power of substitution, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Stockholders of Amerada
Hess Corporation to be held at its offices, 1 Hess Plaza, Route 9, Woodbridge,
New Jersey, on May 5, 1999, at 2:00 p.m., local time, and all adjournments
thereof, as directed on the reverse side of this card, and in their discretion,
upon any other matters which may properly come before the Meeting or any
adjournment thereof.

The undersigned hereby revokes any proxy heretofore given to vote said
shares, and hereby ratifies all that said proxies may do at the Meeting or any
adjournment thereof.

Please indicate on the reverse side of this card how your stock is to be
voted.

IF NOT OTHERWISE SPECIFIED, SHARES WILL BE VOTED FOR ALL NOMINEES IN ITEM
1 AND FOR PROPOSAL 2 ON THE REVERSE SIDE OF THIS CARD.

Receipt of Notice of the Meeting and of the Proxy Statement is hereby
acknowledged.
AMERADA HESS CORPORATION
P.O. BOX 11213
(continued and to be signed on reverse side.) NEW YORK, N.Y. 10203-0213

<PAGE> 22
------
| |
------

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES, AND A VOTE FOR
PROPOSAL 2.

1. Election of the following nominees as Directors for three-year terms
expiring in 2002.

For [X] Withheld [X] Exceptions* [X]

Nominees: E.E. Holiday, W.S.H. Laidlaw, R.B. Oresman,
R.N. Wilson, R.F. Wright

(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below.)

*Exceptions ____________________________________

2. Ratification of the selection of Ernst & Young LLP as independent auditors
for fiscal year ending December 31, 1999.

For [X] Against [X] Abstain [X]

CHANGE OF ADDRESS AND/OR COMMENTS MARK HERE [X]

__|

Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

Dated: __________________________________

Signature(s): ___________________________

_________________________________________

VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [X]

(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE.)