Hess Corporation (NYSE: HES) today reported net income of $32 million, or $0.09 per common share, in the first quarter of 2019, compared to a net loss of $106 million, or $0.38 per common share, in the first quarter of 2018.
On an adjusted basis, the first quarter 2018 net loss was $72 million, or $0.27 per common share. First quarter 2019 results benefitted from higher U.S. crude oil production, partially offset by lower realized crude oil prices and higher depreciation, depletion and amortization expenses compared with the prior-year quarter.
“Our company is successfully executing our strategy to deliver industry leading cash flow growth and improving financial returns well into the next decade,” Chief Executive Officer John Hess said. “We have started the year off with strong operating performance across our portfolio in the first quarter and continued exploration success in Guyana.”
Three discoveries on the Stabroek Block, offshore Guyana, were announced at the Yellowtail-1 and Tilapia-1 wells located in the greater Turbot area, and at the Haimara-1 well. Yellowtail, the 13th discovery on the Stabroek Block, announced on April 18, adds to the previously announced estimate of gross discovered recoverable resources on the block of more than 5.5 billion barrels of oil equivalent (boe). Hess said this growing resource base further underpins the potential for at least five floating production, storage and offloading vessels (FPSOs) producing more than 750,000 gross barrels of oil per day by 2025.
The company said exploration and production net income was $109 million in the first quarter of 2019, compared to a net loss of $25 million, or net income of $12 million excluding items affecting comparability of earnings between periods, in the first quarter of 2018. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $55.91 per barrel in the first quarter of 2019, versus $59.32 per barrel in the year-ago quarter.
The average realized natural gas liquids selling price in the first quarter of 2019 was $18.46 per barrel, versus $21.11 per barrel in the prior-year quarter, while the average realized natural gas selling price was $4.43 per mcf, compared to $3.86 per mcf in the first quarter of 2018. Net production, excluding Libya, was 278,000 boepd in the first quarter of 2019, up from 233,000 boepd in the prior-year quarter, which included 13,000 boepd from a divested asset.
The higher net production volumes were driven by the Gulf of Mexico, Bakken and North Malay Basin. Libya net production was 21,000 boepd in the first quarter of 2019, compared with 22,000 boepd in the year-ago quarter. Excluding items affecting comparability of earnings between periods, cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $11.00 per boe in the first quarter, down 18 percent from $13.46 per boe in the prior-year quarter.
Income tax expense is comprised primarily of taxes in Libya. Excluding items affecting comparability of earnings between periods and Libya, the E&P effective tax rate was an expense of 2 percent in the first quarter compared to a small benefit in the first quarter of 2018.