Hess (HES) Projects 25% Rise in Cash Flow in Next 5 Years
Hess Corporation (HES) expects cash flow to increase 25% annually over the next five years, with crude oil price at $75 per barrel. The company also intends to distribute 75% of this annual free cash flow to shareholders through dividend hikes and share repurchases.
At the JP Morgan Energy, Power and Renewables conference, HES mentioned that the growth will be mostly attributable to its low-cost oil output in Guyana and the Bakken shale area in the United States.
While ExxonMobil XOM, the integrated energy major, holds a 45% stake in the Stabroek block in Guyana, Hess has a 30%. The block is operated by XOM. According to Hess, oil production from the country’s next three production vessels is likely to surpass the expected capacity.
By the end of 2027, HES hopes to have six FPSOs with a gross output capacity of more than 1.2 million barrels per day.
Zacks Rank & Key Picks
Hess currently carries a Zack Rank #3 (Hold).
A couple of better-ranked stocks for investors interested in the energy sector are Evolution Petroleum Corporation EPM and YPF Sociedad Anonima YPF. While Evolution Petroleum sports a Zacks Rank #1 (Strong Buy), YPF Sociedad Anonima carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
YPF Sociedad Anonima is an international energy company, based on the integrated business of hydrocarbons. With its headquarters in Latin America, the company has high standards of efficiency, profitability and responsibility. YPF enjoys a dominant position in Argentina's exploration, production, refining and marketing sectors, as well as a growing presence in petrochemicals.
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