Backed by higher crude prices, Hess returns to profit
- Business & Finance
U.S. oil company Hess Corporation has returned to profit in the third quarter of 2018 compared to the prior-year quarter helped by higher crude oil selling prices.
Hess on Wednesday reported net income of $52 million in the third quarter of 2018, compared to a net loss of $624 million in the third quarter of 2017.
On an adjusted basis, the company reported net income of $123 million in the third quarter of 2018, compared with an adjusted net loss of $324 million in the prior-year quarter.
Hess’ Exploration and Production business recorded a profit of $144 million compared to a loss of $474 million in the same period last year.
The company’s revenues increased to $1.8 billion in this year’s third quarter from $1.6 billion in the prior-year quarter.
Hess said that higher realized crude oil selling prices combined with lower operating costs and depreciation, depletion and amortization expense in the third quarter of 2018 more than offset lower production volumes due to asset sales, compared with the prior-year quarter.
“We achieved another strong quarter, delivering higher production and lower costs than our guidance while keeping capital and exploratory expenditures flat with guidance for the year,” Chief Executive Officer John Hess said.
The company’s average realized crude oil selling price, including the effect of hedging, was $66.08 per barrel in the third quarter of 2018, up from $46.97 per barrel in the year-ago quarter.
The average realized natural gas liquids selling price in the third quarter of 2018 was $24.29 per barrel, versus $17.22 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.11 per mcf, compared to $3.35 per mcf in the third quarter of 2017.
Net production, excluding Libya, was 279,000 boepd in the third quarter of 2018, down from 299,000 boepd in the prior-year quarter. Excluding assets sold in 2017 and Libya, third quarter 2017 net production was 249,000 boepd. Growth in production was driven primarily by the Bakken, North Malay Basin and the Gulf of Mexico.
Net production from the Gulf of Mexico was 71,000 boepd, compared to 59,000 boepd in the prior-year quarter, reflecting higher production primarily from the Penn State and Stampede fields. Production from the Conger field resumed in mid-July after being shut-in since the fourth quarter of 2017 due to a shutdown of the third-party operated Enchilada platform.
Full year 2018 production, excluding Libya, is now expected to be approximately 255,000 boepd, which is the upper end of our previous guidance range.
Offshore Energy Today Staff