Hess (HES) Q1 Earnings Beat on Higher Production Volumes
Hess Corporation HES has reported first-quarter 2024 earnings per share of $3.16, which beat the Zacks Consensus Estimate of $1.73. The bottom line significantly improved from the year-ago quarter’s $1.13.
Total quarterly revenues increased to $3,341 million from $2,453 million in the year-ago period. The top line also beat the Zacks Consensus Estimate of $2,929 million.
Strong quarterly results have been driven by higher oil equivalent production volumes, and increased oil and gas prices.
Hess Corporation Price, Consensus and EPS Surprise
Hess Corporation price-consensus-eps-surprise-chart | Hess Corporation Quote
Operational Update
Exploration & Production
For the quarter under review, the Exploration and Production business reported adjusted earnings of $997 million, up from $405 million a year ago. The business was positively impacted by an increase in realized oil and natural gas prices.
Quarterly hydrocarbon production totaled 476 thousand barrels of oil equivalent per day (MBoe/d), up from 374 MBoe/d in the year-ago period, primarily due to higher production in Guyana and the Bakken. The reported figure also beat our estimate of 389 MBoe/d.
Crude oil production increased from 216 thousand barrels per day (MBbls/d) in first-quarter 2023 to 305 MBbls/d in the quarter under review. The reported figure also beat our estimate of 223.4 MBbls/d.
NGL production totaled 71 MBbls/d, up from 62 MBbls/d in the prior-year quarter. The reported figure beat our estimate of 65.3 MBbls/d.
Natural gas production totaled 599 thousand cubic feet per day (Mcf/d), up from 574 Mcf/d a year ago. However, the reported figure missed our estimate of 602.8 Mcf/d.
Worldwide crude oil realization per barrel of $80.06 (excluding the impacts of hedging) increased from $76.02 in the year-ago period. Also, the global natural gas price improved to $4.62 per Mcf from the year-ago figure of $4.39. Yet, the average global NGL selling price declined to $22.97 per barrel from $24.25 reported a year ago.
Mid-stream
The company generated adjusted net earnings of $67 million, up from $61 million a year ago.
Operating Expenses
Operating expenses for the first quarter totaled $412 million compared with the year-ago level of $382 million. The reported figure is below our estimate of $469.4 million.
Exploration expenses declined to $42 million from the $66 million recorded in the year-ago period. Marketing costs increased to $622 million from $603 million a year ago.
Total costs and expenses increased to $1,926 million from $1,849 million in the prior-year period.
Financials
Net cash provided by operating activities amounted to $885 million. Hess’ capital expenditure for exploration and production activities totaled $927 million.
As of Mar 31, 2024, the company had $1,438 million in cash and cash equivalents. Its long-term debt was $8,415 million at the end of the first quarter.
Outlook
For the second quarter, Hess expects total production of 465-475 thousand barrels of oil equivalent per day. The company forecasts a total exploration and production capital and exploratory expenditure of $1.25 billion for the second quarter.
HES forecasts a total capital and exploratory expenditure of $4.2 billion for 2024.
Zacks Rank & Other Stocks to Consider
Hess currently sports a Zacks Rank #1 (Strong Buy).
Investors interested in the energy sector might look at the following companies that also presently flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company SM is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.15 and $6.73, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
TXO Partners, L.P. TXO is a master limited partnership focused on the acquisition, development, optimization and exploitation of conventional oil, natural gas and natural gas liquid reserves, mainly in North America.
The Zacks Consensus Estimate for TXO’s 2024 and 2025 EPS is pegged at $1.34 and $2.15, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
YPF Sociedad Anonima YPF is a vertically integrated energy company primarily engaged in the oil and gas sector. The company engages in both upstream and downstream activities, including the exploration, production, and refining of crude oil and natural gas.
The Zacks Consensus Estimate for YPF’s 2024 and 2025 EPS is pegged at $6.14 and $7.83, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
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