NEW YORK - Hess Corporation (NYSE: NYSE:HES) announced a net income of $413 million for the fourth quarter of 2023, a decrease from $497 million in the same period of the previous year. Adjusted net income for the quarter also saw a decline to $501 million from $522 million year-over-year. The company attributed the dip to lower realized gas and natural gas liquids (NGL) selling prices, which was partially offset by higher production volumes.
The company's oil and gas net production for the quarter was up 11% to 418,000 barrels of oil equivalent per day (boepd), from a proforma 376,000 boepd in the fourth quarter of 2022. This increase is primarily due to higher production in the Bakken region and Guyana. Specifically, Bakken net production rose 23% to 194,000 boepd, while Guyana net production increased to 128,000 barrels of oil per day (bopd).
Hess reported year-end proved reserves of 1.37 billion barrels of oil equivalent, with organic reserve replacement at 178% at a finding and development cost of $16.00 per boe. This growth in reserves was primarily from new developments in Guyana, including the sanctioning of the Uaru development, and from the Bakken.
The company's exploration and production (E&P) capital and exploratory expenditures for the fourth quarter totaled $1,480 million, which included the purchase of the Liza Unity floating production, storage and offloading vessel (FPSO) for approximately $380 million. The expenditure marked a significant increase from $818 million in the prior-year quarter.
Hess highlighted operational highlights, such as the start of production from the Payara development at the Stabroek Block in Guyana in November, which reached its initial production capacity of approximately 220,000 gross bopd in January 2024. The company also mentioned its plans to continue operating four drilling rigs in the Bakken throughout 2024.
The information reported here is based on the press release statement and does not include speculative or forward-looking statements.
InvestingPro Insights
Hess Corporation's recent financial results reflect a mix of headwinds and strategic advancements. While the company experienced a decline in realized selling prices, its production volume has increased, particularly in key areas such as the Bakken region and Guyana. To provide further context, InvestingPro data indicates a market capitalization of $43.9 billion and a P/E ratio of 30.08, which aligns with the company's solid performance over the last five years. Additionally, Hess has demonstrated a commitment to shareholder returns, maintaining dividend payments for 37 consecutive years, a testament to its financial resilience and operational efficiency.
InvestingPro Tips suggest that despite analysts revising earnings downwards for the upcoming period, the stock is known for low price volatility, implying a level of stability attractive to certain investors. Moreover, the company's moderate level of debt and consistent profitability over the last twelve months further bolster investor confidence. With Hess trading at a high revenue valuation and Price/Book multiples, potential investors should consider the company's long-term return potential and operational consistency.
For those looking to delve deeper into Hess Corporation's financial health and future prospects, InvestingPro offers additional insights. Currently, there are 8 more InvestingPro Tips available, which can be accessed by subscribing to InvestingPro. With the New Year sale, subscriptions are now available at a discount of up to 50%. To take advantage of this opportunity, use coupon code SFY24 for an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 for an additional 10% off a 1-year subscription. These offers provide valuable analysis and data that can help investors make informed decisions.
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