Photo: Baldpate platform in the Gulf of Mexico (for illustration purposes); Source: Hess

Hess swings to profit amid higher oil & gas prices

U.S. oil and gas company Hess Corporation returned to profit during the fourth quarter of 2021, bolstered by higher oil and gas prices.

Hess reported on Wednesday a net income of $265 million in the fourth quarter of 2021, compared with a net loss of $97 million in the fourth quarter of 2020.

The company also reported a net loss of $176 million in the prior-year quarter on an adjusted basis, explaining that the improvement in adjusted after-tax results compared with the prior-year period was primarily due to higher realized selling prices in the fourth quarter of 2021.

John Hess, CEO of Hess, remarked: “This year marks an inflection point in the execution of our strategy. We have built a differentiated portfolio offering a unique value proposition – delivering durable cash flow growth that enables us to continue to invest in some of the highest return projects in the industry and to start growing our cash returns to our shareholders.”

Specifically, Hess’ E&P net income was $309 million in the fourth quarter of 2021, compared with a net loss of $39 million in the fourth quarter of 2020.

The firm’s net production – excluding Libya – was 295,000 boepd in the fourth quarter of 2021, compared with 309,000 boepd in the fourth quarter of 2020, or 295,000 boepd proforma for assets sold.

In addition, net production for Libya was 21,000 boepd in the fourth quarter of 2021 compared with 12,000 boepd in the prior-year quarter.

The oil company’s E&P capital and exploratory expenditures were $593 million in the fourth quarter of 2021, compared with $371 million in the prior-year quarter. The increase is primarily driven by the higher drilling and development activity in Guyana and the Bakken.

When it comes to investments for this year, Hess revealed earlier this week that its Exploration & Production capital and exploratory budget for 2022 would amount to $2.6 billion. About 80 per cent of this will be allocated to Guyana and the Bakken.

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The company’s net production is forecast to average between 330,000 and 340,000 barrels of oil equivalent per day in 2022, excluding Libya.