Hess Corp (HES) Q4 Earnings: Production Up Amidst Price Challenges
Net Income: Reported $413 million, or $1.34 per share, a decrease from $497 million, or $1.61 per share in Q4 2022.
Adjusted Net Income: $501 million, or $1.63 per share, down from $522 million, or $1.69 per share in the prior-year quarter.
Production: Net production rose to 418,000 boepd, an 11% increase from the previous year's quarter.
Capital Expenditures: E&P capital and exploratory expenditures surged to $1,480 million, including a significant FPSO purchase.
Reserves: Year-end proved reserves estimated at 1.37 billion boe, with a 178% organic reserve replacement.
Liquidity: Hess Corporation held $1.7 billion in cash and cash equivalents, excluding the Midstream segment.
On January 31, 2024, Hess Corp (NYSE:HES) released its 8-K filing, detailing its financial performance for the fourth quarter of 2023. The independent oil and gas producer, with key assets in the Bakken Shale, Guyana, the Gulf of Mexico, and Southeast Asia, reported a net income of $413 million, or $1.34 per share. This represents a decline from the $497 million, or $1.61 per share, reported in the fourth quarter of 2022. The adjusted net income also saw a slight decrease to $501 million, or $1.63 per share, compared to $522 million, or $1.69 per share, in the prior-year quarter.
The company's performance reflects the challenges of lower realized gas and NGL selling prices, which were partially offset by higher production volumes. The importance of these figures lies in the company's ability to navigate the volatile energy market while continuing to increase production, a key indicator of operational efficiency and future growth potential.
Financial and Operational Highlights
Hess Corp's exploration and production (E&P) segment reported a net income of $512 million for the quarter, down from $641 million in the fourth quarter of 2022. The average realized crude oil selling price was slightly higher at $76.63 per barrel, compared to $76.07 per barrel in the prior-year quarter. However, the average realized NGL selling price and natural gas selling price were lower, contributing to the overall decrease in adjusted net income.
Net production increased notably to 418,000 boepd, up from 376,000 boepd in the previous year's quarter, proforma for asset sold, primarily due to higher production in the Bakken and Guyana. This increase in production is significant as it demonstrates Hess Corp's successful expansion efforts and operational excellence.
The company's financial achievements, particularly the 178% organic reserve replacement at a finding and development cost of $16.00 per boe, underscore its effective resource management and long-term sustainability in the oil and gas industry. The year-end proved reserves are estimated to be 1.37 billion boe, compared with 1.26 billion boe at the end of 2022, indicating a robust reserve base for future production.
"The decrease in adjusted after-tax results compared with the prior-year quarter reflects lower realized gas and NGL selling prices, partially offset by higher production volumes, in the fourth quarter of 2023," stated Hess Corp.
On the balance sheet, Hess Corp had cash and cash equivalents of $1.7 billion and debt and finance lease obligations totaling $5.6 billion as of December 31, 2023, excluding the Midstream segment. The Midstream segment had cash and cash equivalents of $6 million and total debt of $3.2 billion. The company's liquidity position remains strong, providing flexibility for future investments and operations.
Overall, Hess Corp's fourth-quarter performance highlights the company's resilience in a challenging price environment and its ability to increase production. While the company faces headwinds from lower realized prices, its strategic investments and operational efficiencies position it well for future growth. As Hess Corp continues to navigate the dynamic energy market, investors and stakeholders will closely monitor its ability to maintain profitability and capitalize on its strong reserve base.
For more detailed information and analysis on Hess Corp's financial performance, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Hess Corp for further details.
This article first appeared on GuruFocus.
