Hess Profit Soars on Increased Guyana Output, Positive Sign for Exxon
(Reuters) — Hess Corp. on Thursday reported first-quarter earnings well above analysts' forecasts, driven by a 28% increase in Guyana oil output, a sign Exxon Mobil's results out Friday could also top forecasts.
Last October, Hess agreed to sell itself to Chevron for $53 billion in stock, but the deal has been stalled by a regulatory review and challenged by Exxon, which claims a right to Hess's Guyana assets. Hess and Chevron dispute Exxon's claim, now before an arbitration panel.
Hess's production rose 27% to 476,000 barrels of oil and gas per day (boepd), on a 70% year-over-year increase in Guyana to 190,000 bpd. Its Bakken shale output also rose, the company said.
The company posted higher than expected production in Guyana on much lower than forecast spending, analysts said. The results indicated that the consortium's three offshore production vessel were pumping near or at capacity, a positive sign for Exxon results.
Hess share traded up a fraction at $159.29 in morning trade even as the wider market fell sharply on rising inflation expectations and poor results technology giant Meta.
Chevron's proposed deal would give it Hess' 30% stake in the Stabroek Block, a major offshore oil project in Guyana that has been tallied more than 30 oil discoveries since 2015.
Exxon and CNOOC Ltd., another partner in the Guyana consortium, have filed arbitration cases with the International Chamber of Commerce. Hess expects any decision may not arrive until year-end, leaving a closing unlikely this year.
Worldwide average realized crude oil selling price, excluding hedges, rose 7.8% to $80.06 per barrel during the quarter from a year earlier.
Quarterly profit of $3.16 per share beat analysts' average estimate of $1.67 per share, according to LSEG data.
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