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Hess (HES) Q2 Loss Narrower Than Expected, Revenues Beat
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Hess Corporation (HES - Free Report) reported adjusted second-quarter 2016 loss from continuing operations of $1.11 per share, narrower than the Zacks Consensus Estimate of a loss of $1.26. However, the quarterly loss was substantially wider than the year-ago loss of 52 cents, mainly due to a drop in oil and gas prices.
Revenues decreased to $1,269 million in the quarter from $1,935 million a year ago. However, revenues surpassed the Zacks Consensus Estimate of $1,053 million.
Second-Quarter Operational Update
In the reported quarter, the Exploration and Production business incurred a loss of $328 million, narrower than the year-earlier loss of $502 million.
Quarterly hydrocarbon production was 313 thousand barrels of oil equivalent per day, down 20% year over year. The decrease in production can be attributed to unplanned downtime at the Tubular Bells field and the Conger field as well as planned downtime at several offshore fields including the Tubular Bells Field and the Valhall Field in Norway. Moreover, lower spending decreased yield at the Bakken shale play and Equatorial Guinea.
Crude oil production was 179 thousand barrels per day as against 246 thousand barrels per day in the year-ago quarter. Natural gas liquids production totaled 44 thousand barrels compared with 42 thousand barrels last year. Natural gas output was 539 thousand cubic feet (Mcf) as against 617 Mcf a year ago.
Worldwide crude oil realization per barrel of $41.95 (including the impact of hedging) decreased nearly 25% year over year. Worldwide natural gas prices plunged 20% year over year to $3.58 per Mcf. The average worldwide natural gas liquids selling price fell to $9.03 per barrel from $11.06 in the year-ago quarter.
Financials
Quarterly net cash flow from operations was $197 million at the end of the quarter. Hess’ capital expenditures totaled $485 million, down 52% from $1,006 in the prior-year quarter.
As of Jun 30, 2016, the company had approximately $3,095 million in cash and $5,868 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 23.5%.
Guidance
Hess has estimated capital expenditure for 2016 at $2.1 billion. Production for the full year is projected in the range of 315,000–325,000 boepd, excluding Libya.
Zacks Rank and Other Stocks to Consider
Hess currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Hess (HES) Q2 Loss Narrower Than Expected, Revenues Beat
Hess Corporation (HES - Free Report) reported adjusted second-quarter 2016 loss from continuing operations of $1.11 per share, narrower than the Zacks Consensus Estimate of a loss of $1.26. However, the quarterly loss was substantially wider than the year-ago loss of 52 cents, mainly due to a drop in oil and gas prices.
Revenues decreased to $1,269 million in the quarter from $1,935 million a year ago. However, revenues surpassed the Zacks Consensus Estimate of $1,053 million.
Second-Quarter Operational Update
In the reported quarter, the Exploration and Production business incurred a loss of $328 million, narrower than the year-earlier loss of $502 million.
Quarterly hydrocarbon production was 313 thousand barrels of oil equivalent per day, down 20% year over year. The decrease in production can be attributed to unplanned downtime at the Tubular Bells field and the Conger field as well as planned downtime at several offshore fields including the Tubular Bells Field and the Valhall Field in Norway. Moreover, lower spending decreased yield at the Bakken shale play and Equatorial Guinea.
Crude oil production was 179 thousand barrels per day as against 246 thousand barrels per day in the year-ago quarter. Natural gas liquids production totaled 44 thousand barrels compared with 42 thousand barrels last year. Natural gas output was 539 thousand cubic feet (Mcf) as against 617 Mcf a year ago.
HESS CORP Price, Consensus and EPS Surprise
HESS CORP Price, Consensus and EPS Surprise | HESS CORP Quote
Worldwide crude oil realization per barrel of $41.95 (including the impact of hedging) decreased nearly 25% year over year. Worldwide natural gas prices plunged 20% year over year to $3.58 per Mcf. The average worldwide natural gas liquids selling price fell to $9.03 per barrel from $11.06 in the year-ago quarter.
Financials
Quarterly net cash flow from operations was $197 million at the end of the quarter. Hess’ capital expenditures totaled $485 million, down 52% from $1,006 in the prior-year quarter.
As of Jun 30, 2016, the company had approximately $3,095 million in cash and $5,868 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 23.5%.
Guidance
Hess has estimated capital expenditure for 2016 at $2.1 billion. Production for the full year is projected in the range of 315,000–325,000 boepd, excluding Libya.
Zacks Rank and Other Stocks to Consider
Hess currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Sasol Ltd (SSL - Free Report) , Dril-Quip, Inc. (DRQ - Free Report) and Murphy USA Inc (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>