Hess Clears Deck With Loss and Asset Sales To Fund Liza in Guyana

Oil and gas explorer Hess Corporation $HES reported third-quarter 2017 earnings below expectations before the market opened. Stock off 4.5% with production, concerns, with debt worries eased by asset sales.

Oil and gas explorer Hess Corporation $HES reported third-quarter 2017 earnings below expectations before the market opened. Stock off 4.5% with production, concerns, with debt worries eased by asset sales. Hess is an independent American oil and gas explorer and producer. $HES has agreements to sell interests in Norway for $2 billion, in Equatorial Guinea for $650 million.

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Hess has commenced the process to sell our interests in Denmark in 2018. Proceeds along with cash on balance sheet to prefund our world class investment opportunity offshore Guyana (Hess – 30 percent). Hess is currently on track with development activities on Liza Phase One, with first production set for 2020. Additionally, Hess and Esso confirmed a second giant oil field in Guyana with estimated recoverable resources of 500 million barrels.

Earnings Q3 adjusted loss per share -$1.07,  loss per share $2.02 on revenues and non-operating income $‍1,666 million versus $1,196 million last year v. expected EPS $-1.29, revenue  $1.27 billion via Thomson Reuters I/B/E/S

Reaction: Hess Corp. NYSE: HES Close 42.21 -1.84 (-4.18%)

Hess reported third quarter 2017 net production.
 
  • Net production from Bakken of 103,000 boepd was impacted by reduced field availability due to adverse weather, delays in completing new wells​
  • Net production from Gulf of Mexico was 59,000 boepd, compared to 61,000 boepd in prior-year quarter​

    Hess Corp qtrly ‍total production was 299,000 barrels of oil equivalent per day (boepd), excluding Libya​

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Outlook

Q4 production will be negatively impacted by hurricane-related downtime and expected lower entitlement at JDA as temporary adjustment reverses​

Cash and cash equivalents were $2.5 billion at September 30, 2017

Last Quarter: Hess $HES Misses Earnings, Where Now With Lower Oil Prices?

Since early 2014 Hess’s long-term debt load has been rising from near $5.5 billion to near $6.7 billion. During the second quarter of 2017 both oil and natural gas prices fell putting further pressure on exploration firms like Hess. 

Hess operates in two key U.S. shale plays, the North Dakota Bakken and Three Forks formations, producing shale oil and gas, and the Ohio Utica Basin, where they primarily produce natural gas and natural gas liquids (NGLs). 

Hess is the sixth-largest producer in the Gulf of Mexico and also has offshore assets in Europe, Asia Pacific and West Africa. They operate major offshore projects by Gulf of Mexico partners and by the Malaysian national oil company.

Source: HES, Criterion

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