Hess Corp. (HES) reported first-quarter earnings of $1.50 per share, easily beating the Zacks Consensus Estimate of $1.07 and the year-earlier loss of 18 cents. Total revenue increased 34% year-over-year to $9.2 billion.
Operational Performance
The Exploration and Production (E&P) segment posted a $551 million profit in the quarter, compared with a loss of $64 million in the year-earlier quarter. Results were positively impacted by a significant increase in oil prices and volumes.
Quarterly crude oil and natural gas production on an oil-equivalent barrel basis was 423 thousand barrels of oil equivalent per day (MBOE/d) — 72% liquids and 28% natural gas — up more than 8% year over year.
Worldwide crude oil realization per barrel during the quarter was $63.62 (including the impact of hedging), up 85% year over year. Worldwide natural gas prices (including the impact of hedging) increased approximately 17% year over year to $5.92 per thousand cubic feet (Mcf).
The Marketing and Refining segment posted earnings of $87 million, compared with $102 million in the year-earlier quarter, primarily due to lower margins. Hess’ share from the HOVENSA refinery (located on the island of St. Croix in the U.S. Virgin Islands) was an $85 million loss, compared with a $41 million loss in the year-earlier quarter.
Quarterly net cash flow from operations was $825 million. Hess’ capital expenditures totaled $861 million, of which approximately 98% went into the E&P business. At the end of the quarter, the company had approximately $1.37 billion in cash and $4.33 billion in long-term debt.
Outlook
We continue to see upstream momentum on the back of the company’s large inventory of exploration and development projects. Hess’ improving fundamentals, commodity price leverage and exposure to areas with high resource potential have improved the company’s prospect.
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