Hess Corporation (NYSE: HES) today reported a net loss of $6 million, or $0.02 per common share, in the second quarter of 2019, compared with a net loss of $130 million, or $0.48 per common share, in the second quarter of 2018. On an adjusted basis, the corporation reported a net loss of $28 million, or $0.09 per common share, in the second quarter of 2019, compared with an adjusted net loss of $56 million, or $0.23 per common share, in the prior-year quarter. The improved after-tax adjusted results reflect increased U.S. crude oil production and reduced exploration expenses, partially offset by the impact of lower realized selling prices and higher depreciation, depletion and amortization expenses.
“Our production is now expected to come in at the upper end of our full year guidance range, while our capital and exploratory expenditures are projected to come in below our original full year guidance,” said John Hess, chief executive officer. “In Guyana, we have just increased the estimate of gross discovered recoverable resources for the Stabroek Block to more than six billion barrels of oil equivalent and continue to see multibillion barrels of additional exploration potential. Our portfolio is on track to generate industry leading cash flow growth and increasing returns to shareholders.”
Exploration and Production
E&P net income was $68 million in the second quarter of 2019, compared with net income of $31 million in the second quarter of 2018. On an adjusted basis, second quarter 2019 net income was $46 million, compared with net income of $21 million in the prior-year quarter. The corporation’s average realized crude oil selling price, including the effect of hedging, was $60.45 per barrel in the second quarter of 2019, versus $62.65 per barrel in the prior-year quarter. The average realized natural gas liquids selling price in the second quarter of 2019 was $12.18 per barrel, versus $20.51 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.92 per mcf, compared with $4.12 per mcf in the second quarter of 2018.
Net production, excluding Libya, was 273,000 boepd in the second quarter of 2019, up from second quarter 2018 net production of 247,000 boepd, or 234,000 boepd excluding assets sold. The higher production was primarily driven by the Bakken and the Gulf of Mexico. Libya net production was 20,000 boepd in the second quarter of 2019, compared with 18,000 boepd in the prior-year quarter.
Excluding items affecting comparability of earnings between periods, cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $12.11 per boe in the second quarter, down 9 percent from $13.37 per boe in the prior-year quarter. Income tax expense is comprised primarily of taxes in Libya.
Operational Highlights for the Second Quarter of 2019:
Bakken (Onshore U.S.): Net production from the Bakken increased 23 percent to 140,000 boepd from 114,000 boepd in the prior-year quarter, due to increased drilling activity and improved well performance. The Corporation operated six rigs in the second quarter, drilling 39 wells and bringing 39 new wells online. Full year net production for the Bakken is expected to be in the range of 140,000 boepd to 145,000 boepd, which is at the upper end of previous guidance.
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.