By Ernest Scheyder
Oct 30 (Reuters) - Political and military unrest in Libyasharply curtailed Hess Corp's output and profits in thethird quarter, and forced it to temper expectations for theyear, the oil and natural gas producer said on Wednesday.
Hess, which first began Libyan operations in 1955, saidpolitical instability in the nation crimped its production inthe quarter through Sept. 30, and that it now expects full-yearoutput to be at the low end of an expected range of 340,000 to355,000 barrels of oil equivalent per day (boe/d).
Libya's total exports have slumped to around 90,000 barrelsper day, less than 10 percent of capacity, as protests and laborstrikes at oil export terminals have halted operations at portsand fields.
While Libyan production does not materially affect itsprofit, the company said it would have to spend more in the OPECnation due to the uncertainty.
The country's oil production has been sharply down sinceuprisings against former leader Muammar Gaddafi began in 2011.Libya's National Oil Corporation controls the nation'sproduction and partners with Hess and other internationalcompanies, including ConocoPhillips, Marathon Oil and BASF's Wintershell.
Eni, the largest foreign oil producer in Africa,echoed Hess's concerns on Wednesday when it cut its 2013production outlook to reflect shrinking volumes from Libya andNigeria. Eni, which is based in Italy, now expects itsproduction for the year to be lower than it was in 2012.
Hess's total oil and gas output fell during the thirdquarter to 310,000 boe/d from 402,000 boe/d a year earlier.
The company's asset sales in Russia, the UK and Azerbaijancontributed to the global output drop. In the year-earlierquarter, those assets had boosted production.
Still, the company's expansion in North Dakota's Bakkenshale field, which boosted its output, was a "silver lining"during the quarter, Capital One Securities analyst PhillipsJohnston said in a note to clients. Production in the state,where Hess spent the lion's share of its $1.53 billion capitalbudget during the quarter, grew 14 percent to 71,000 boe/d.
Hess plans to open about 170 new wells in the Bakken thisyear, and has cut the average cost to complete a well there by 7percent to $7.8 million.
The company plans to shut down part of its Bakken operationsin the fourth quarter as it finishes expansion of its Tioga,North Dakota, natural gas fractionation plant. Once completed,the plant will allow Hess to process more natural gas, abyproduct of oil drilling, and reduce flaring.
Hess reported net income of $420 million, or $1.23 pershare, in the third quarter, compared with $557 million, or$1.64 per share, a year earlier.
Excluding one-time items, Hess earned $1.18 per share in thethird quarter. By that measure, analysts expected $1.44 pershare, according to Thomson Reuters I/B/E/S.
Revenue dropped 23 percent from a year earlier to $2.69billion. Analysts expected $2.67 billion.
Shares of New York-based Hess fell 3.5 percent to $80.56. Asof Tuesday's close, the stock has gained 58 percent this year.
Activist investor Elliot Management took a large stake inHess earlier this year and put three new directors on thecompany's board.
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