Wednesday, June 7, 2023

Hess spent US$580M in first quarter for exploration, production works

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For the first quarter of 2022, Hess Corporation said its exploration and production expenditures totaled US$580 million compared with US$309 million in the prior quarter, primarily due to higher drilling and development activities in Guyana, the Bakken, and Malaysia.

It said last week ahead of its 2022 first quarter earnings call that midstream capital expenditures were US$37 million, compared to US$23 million in the prior-year quarter.

For net production, excluding Libya, Hess said this was 276,000 barrels of oil equivalent per day (boepd) in the first quarter of 2022, compared with 315,000 boepd in the first quarter of 2021, or 304,000 boepd proforma for assets sold, primarily due to field decline and unplanned downtime in the Gulf of Mexico.

With respect to liquidity, Hess Corporation had cash and cash equivalents of US$1.37 billion and debt and finance lease obligations totaling US$5.61 billion at March 31, 2022. The Midstream segment had cash and cash equivalents of US$4 million and total debt of US$2.6 billion at March 31, 2022.

In February, the company repaid the remaining US$500 million outstanding of its US$1.0 billion term loan and, in March, increased its quarterly dividend to US$0.375 per share commencing in the first quarter of 2022.

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It was keen to note that net cash used in operating activities was US$156 million in the first quarter of 2022, compared with net cash provided by operating activities of US$591 million in the first quarter of 2021. Net cash provided by operating activities before changes in operating assets and liabilities was US$952 million in the first quarter of 2022, compared with US$815 million in the prior-year quarter primarily due to higher realised selling prices, partially offset by the impact of lower sales volumes.

In a brief comment, Chief Executive Officer (CEO) John Hess said, “Our differentiated portfolio is uniquely positioned to deliver industry-leading cash flow growth and financial returns in the coming years.”

He added, “As our portfolio becomes increasingly free cash flow positive, we commit to prioritizing the return of capital to our shareholders through further dividend increases and share repurchases.”

Hess has a 30% stake in the Stabroek Block, offshore Guyana, where ExxonMobil has discovered nearly 11 billion oil-equivalent barrels.

Hess also holds a 20% stake in the Kaieteur Block, which was previously estimated to hold an unproven 2.1 billion barrels. ExxonMobil, also the operator of Kaieteur, made a non-commercial discovery at the Tanager-1 well in 2020.

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