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Hess Corporation (HES - Free Report) reported adjusted fourth-quarter 2020 loss per share of 58 cents, narrower than the Zacks Consensus Estimate of a loss of 67 cents and the year-ago quarter’s loss of 60 cents.
Notably, quarterly revenues declined to $1,417 million from $1,699 million a year ago. However, the top line beat the Zacks Consensus Estimate of $1,251 million.
Higher production from Bakken play and lower operating expenses led the company to report better-than-expected results in the fourth quarter. This was offset partially by lower realized oil and gas prices.
Hess Corporation Price, Consensus and EPS Surprise
In the quarter under review, the Exploration and Production business reported an adjusted net loss of $118 million compared with a loss of $124 million a year ago. The business was favored by higher production from Bakken play, offset partially by lower realized oil and gas prices.
Quarterly hydrocarbon production was 321 thousand barrels of oil equivalent per day (MBoe/d), down from 338 MBoe/d in the year-ago period on lower contributions from Gulf of Mexico – offshore U.S. resources. This was offset partially by higher production from prolific Bakken play.
Crude oil production decreased from 183 thousand barrels per day (MBbls/d) in fourth-quarter 2019 to 167 MBbls/d. However, natural gas liquids production totaled 64 MBbls/d, up from 52 MBbls/d in the prior-year quarter. But natural gas output was 538 thousand cubic feet per day (Mcf/d), down from 618 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $39.45 (excluding the impact of hedging) declined from $55.05 in the year-ago period. Moreover, worldwide natural gas prices fell to $3.35 per Mcf from the year-ago $3.48. However, the average worldwide natural gas liquids selling price rose to $15.80 per barrel from $13.87 a year ago.
Midstream
From the midstream business, the company generated adjusted net earnings of $62 million, significantly up from $49 million a year ago. The rise can be attributed to improvement in tariff rates and volumes.
Operating Expenses
Operating expenses for the fourth quarter totaled $313 million, down from the year-ago $365 million. Marketing costs also decreased to $281 million from $428 million a year ago. Moreover, exploration expenses decreased to $60 million from $106 million in the year-ago period.
Total costs and expenses declined to $1,372 million from $1,763 million in fourth-quarter 2019.
Financials
Quarterly net cash flow from operations was $486 million for the fourth quarter, reflecting a significant improvement from the year-ago figure of $286 million. Hess’ capital expenditures for exploration and production activities totaled $371 million, down from $876 million in the prior-year quarter.
As of Dec 31, 2020, the company had $1,739 million in cash & cash equivalents. Its long-term debt was recorded at $8,286 million at fourth quarter-end. Current maturity of the long-term debt is $10 million. Debt to capitalization at quarter-end was 57.5%.
Proved Reserves
The company’s year-end proved reserves were recorded at 1,170 million barrels of oil equivalent (BoE), down from 1,197 million BoE at Dec 31, 2019.
Guidance
Hess projects its capital expenditures for exploration and production activities at $1.9 billion, suggesting an increase from $1.8 billion in 2020. Notably, the company expects its 2021 net production (excluding Libya) at 310,000 (BoE/d).
Zacks Rank & Key Picks
Hess currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , DCP Midstream, LP and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback carries a Zacks Rank #2 (Buy), Matador and DCP Midstream sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
DCP Midstream has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
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Hess (HES) Q4 Earnings Beat Estimates, Proved Reserves Grow
Hess Corporation (HES - Free Report) reported adjusted fourth-quarter 2020 loss per share of 58 cents, narrower than the Zacks Consensus Estimate of a loss of 67 cents and the year-ago quarter’s loss of 60 cents.
Notably, quarterly revenues declined to $1,417 million from $1,699 million a year ago. However, the top line beat the Zacks Consensus Estimate of $1,251 million.
Higher production from Bakken play and lower operating expenses led the company to report better-than-expected results in the fourth quarter. This was offset partially by lower realized oil and gas prices.
Hess Corporation Price, Consensus and EPS Surprise
Hess Corporation price-consensus-eps-surprise-chart | Hess Corporation Quote
Q4 Operational Update
Exploration and Production
In the quarter under review, the Exploration and Production business reported an adjusted net loss of $118 million compared with a loss of $124 million a year ago. The business was favored by higher production from Bakken play, offset partially by lower realized oil and gas prices.
Quarterly hydrocarbon production was 321 thousand barrels of oil equivalent per day (MBoe/d), down from 338 MBoe/d in the year-ago period on lower contributions from Gulf of Mexico – offshore U.S. resources. This was offset partially by higher production from prolific Bakken play.
Crude oil production decreased from 183 thousand barrels per day (MBbls/d) in fourth-quarter 2019 to 167 MBbls/d. However, natural gas liquids production totaled 64 MBbls/d, up from 52 MBbls/d in the prior-year quarter. But natural gas output was 538 thousand cubic feet per day (Mcf/d), down from 618 Mcf/d a year ago.
Worldwide crude oil realization per barrel of $39.45 (excluding the impact of hedging) declined from $55.05 in the year-ago period. Moreover, worldwide natural gas prices fell to $3.35 per Mcf from the year-ago $3.48. However, the average worldwide natural gas liquids selling price rose to $15.80 per barrel from $13.87 a year ago.
Midstream
From the midstream business, the company generated adjusted net earnings of $62 million, significantly up from $49 million a year ago. The rise can be attributed to improvement in tariff rates and volumes.
Operating Expenses
Operating expenses for the fourth quarter totaled $313 million, down from the year-ago $365 million. Marketing costs also decreased to $281 million from $428 million a year ago. Moreover, exploration expenses decreased to $60 million from $106 million in the year-ago period.
Total costs and expenses declined to $1,372 million from $1,763 million in fourth-quarter 2019.
Financials
Quarterly net cash flow from operations was $486 million for the fourth quarter, reflecting a significant improvement from the year-ago figure of $286 million. Hess’ capital expenditures for exploration and production activities totaled $371 million, down from $876 million in the prior-year quarter.
As of Dec 31, 2020, the company had $1,739 million in cash & cash equivalents. Its long-term debt was recorded at $8,286 million at fourth quarter-end. Current maturity of the long-term debt is $10 million. Debt to capitalization at quarter-end was 57.5%.
Proved Reserves
The company’s year-end proved reserves were recorded at 1,170 million barrels of oil equivalent (BoE), down from 1,197 million BoE at Dec 31, 2019.
Guidance
Hess projects its capital expenditures for exploration and production activities at $1.9 billion, suggesting an increase from $1.8 billion in 2020. Notably, the company expects its 2021 net production (excluding Libya) at 310,000 (BoE/d).
Zacks Rank & Key Picks
Hess currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space include Matador Resources Company (MTDR - Free Report) , DCP Midstream, LP and Diamondback Energy, Inc. (FANG - Free Report) . While Diamondback carries a Zacks Rank #2 (Buy), Matador and DCP Midstream sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
DCP Midstream has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
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