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Hess (HES) Q4 Loss Narrower than Expected; View Raised

Hess CorporationHES reported adjusted fourth-quarter 2016 loss from continuing operations of $1.01 per share, narrower than the Zacks Consensus Estimate of loss of $1.09. The company had incurred a loss of $1.40 per share in the year-ago quarter. Higher oil price realizations as well as improved total production unit costs resulted in the narrower loss.

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Revenues decreased marginally year over year to $1,386 million in the quarter from $1,387 million. The top line, however, beat the Zacks Consensus Estimate of $1,281 million.

Full-year 2016 loss from continuing operation - excluding one-time items − was at $4.94 per share. The company had posted loss of $3.93 per share a year ago. The loss was, however, narrower than the Zacks Consensus Estimate of a loss of $5.02 per share.

Total revenue decreased 26.2% to $4,844 million from $6,561 million in 2015. Revenues for 2016 were above the Zacks Consensus Estimate of $4,684 million.

Fourth-Quarter Operational Performance

In the reported quarter, the Exploration and Production (E&P) business posted adjusted loss of $257 million, narrower the year-earlier loss of $328 million.

Quarterly hydrocarbon production was 311 thousand barrels of oil equivalent per day (MBOE/d), down 15.5% year over year.

Crude oil production was 186 thousand barrels per day as against 233 thousand barrels per day in the year-ago quarter. Natural gas liquids production remained flat year over year at 40 thousand barrels. However, natural gas output was 512 thousand cubic feet (Mcf) (up from 571 Mcf).

Worldwide crude oil realization per barrel of $45.97 (including the impact of hedging) increased over 5% year over year. Worldwide natural gas prices fell 5.8% year over year to $3.24 per Mcf.

Financials

Quarterly net cash flow from operations was $326 million at the end of the quarter. Hess' capital expenditures totaled $414 million.

As of Dec 31, 2016, the company had approximately $2,732 million in cash and $6,694 million in long-term debt. The debt-to-capitalization ratio at the end of the quarter was 30.4%.

Reserves Replacement

At the end of 2016, oil and gas proved reserves were 1,109 million barrels of oil equivalent compared with 1,086 million barrels of oil equivalent (mmboe) at the end of 2015. In 2016, the company added 172 mmboe to proved reserves. Lower crude oil prices led to negative revisions to proved reserves of 29 million barrels of oil equivalent.

Hess Corporation Price, Consensus and EPS Surprise

Hess Corporation Price, Consensus and EPS Surprise | Hess Corporation Quote

2017 Capital Budget

Hess has increased its 2017 capital expenditure to $2.25 billion from $1.9 billion in 2016. Oil and gas production, excluding Libya, is estimated in the range of 300,000-310,000 boe/d compared with full-year 2016 net production of 321,000 boe/d

Zacks Rank

Hess currently has a Zacks Rank #3 (Hold). Some better-ranked players in the same space include Braskem S.A. BAK , Suncor Energy, Inc. SU and Noble Midstream Partners L.P. NBLX . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Braskem posted a positive earnings surprise of 107.79% in the last reported quarter.

Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It had an average earnings surprise of 40.55% in the four trailing quarters.

Noble Midstream Partners posted a negative earnings surprise of 77.78% in the last reported quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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