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Hess Corp (NYSE:HES) reported on Wednesday a smaller-than-forecast loss for the first quarter of 2018 as higher oil prices and lower operating costs helped it to offset a decline in production.
Hess booked a net loss of US$106 million in Q1, or US$0.38 per common share, down from a net loss of US$324 million, or $1.07 per common share, in Q1 2017.
Excluding items, adjusted net loss was US$72 million in Q1 2018, or US$0.27 per common share, smaller than the Zacks Consensus Estimate for a loss of US$0.54 per share, and the WSJ’s analyst estimate for a US$0.49 per-share loss.
“The improved after-tax adjusted results reflect higher realized crude oil selling prices, lower operating costs and depreciation, depletion and amortization expense, partially offset by lower production volumes, primarily due to asset sales,” Hess said.
Hess’s average realized crude oil selling price, including the effect of hedging, was $59.32 per barrel in Q1 2018, up from $48.58 per barrel in Q1 2017.
Revenues came in at US$1.39 billion, above the prevailing analyst estimates for US$1.16 billion-1.18 billion. The Q1 revenue increased from the Q1 2017 revenue of US$1.254 billion.
Net production, excluding Libya, dropped to 233,000 boepd in the first quarter of 2018, compared to 307,000 boepd in the prior-year quarter, mainly due to asset sales, an unplanned downtime at the third-party operated Enchilada platform in the Gulf of Mexico, and natural decline.
Higher production in the Bakken, as well as from the North Malay Basin offshore Malaysia, partially offset some of the lower volume production, said Hess. Higher oil prices boosted Hess’s production in the Bakken, where the corporation’s net production rose 12 percent to 111,000 boepd in Q1 from 99,000 boepd in the year-ago quarter, thanks to increased drilling activity and improved well performance. The Corporation operated an average of four rigs in Q1, drilling 23 wells and bringing 13 new wells online. Hess plans to add a fifth rig in Q3 and a sixth rig in Q4 this year—a sign that the Bakken is back.
“Our focus for 2018 is on execution and we believe we are off to a very strong start to the year,” CEO John Hess said. “In the first quarter, we increased cash returns to shareholders, reduced debt, exceeded our production guidance, continued to lower our costs and announced two significant oil discoveries offshore Guyana – Ranger and Pacora.”
Hess saw its share price jump by 2.93% to $59.34 at market close on Wednesday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.