Hess sinks deeper into the red despite higher output

U.S. oil and gas company Hess Corporation sank deeper into the red in the last quarter of 2019 despite higher production levels when compared to the prior-year quarter.

Hess on Wednesday reported a net loss of $222 million in 4Q 2019 compared with the net loss of $4 million in the fourth quarter of 2018.

Adjusted net loss was $180 million compared with an adjusted net loss of $77 million in the fourth quarter of 2018.

The decrease in after-tax adjusted results primarily reflects lower natural gas and natural gas liquids realized selling prices, partially offset by higher production volumes and improved Midstream earnings, compared with the prior-year quarter, Hess explained.

The company’s average realized crude oil selling price, including the effect of hedging, was $54.90 per barrel in the fourth quarter of 2019, versus $55.24 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2019 was $13.87 per barrel, versus $21.19 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.48 per mcf, compared with $4.82 per mcf in the fourth quarter of 2018.

Oil and gas net production averaged 316,000 barrels of oil equivalent per day (boepd), excluding Libya, up from 267,000 boepd in the fourth quarter of 2018. The higher production was primarily driven by the Bakken. Net production from the Gulf of Mexico was 70,000 boepd, compared with 68,000 boepd in the prior-year quarter.

Exploration and Production (E&P) capital and exploratory expenditures in 4Q 2019 were $876 million, compared with $618 million in the prior-year quarter.

As previously reported, Hess’ E&P capital and exploratory expenditures for 2020 are expected to be $3 billion. Hess plans to use more than 80% of it on high return investments in Guyana and the Bakken.

Oil and gas production in 2020, excluding Libya, is forecast to be in the range of 330,000 boepd to 335,000 boepd, compared to full year 2019 net production, excluding Libya, of 290,000 boepd.

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